It's time to counter bad press
Tuesday, July 28th 2009, 9:18PM 
15 Comments
| « The 10 people who will decide advisers' future | The Blog is back: So too fin coys » |
Special Offers
Comments from our readers
On 29 July 2009 at 11:32 am Ian Hardman said:
Hi Phil,
I thought that Sovereign acquited themselves very well and in a Professional Manner. It is unfortunate that John Campbell did not focus on the central issue of Non-Disclosure and what materiality is and how it can impact on the underlying risk assessment of the product and the flow on effects to the client in the long term.
The other issue here is to do with replacement business. While it appears that all compliance issues and processes were followed was it wise in hindsight to replace the AMP policy given it may have predated some of the clients medical conditions. Replacing any insurance policy requires justification and client's understanding and sign off.
This observation is not saying that the adviser in this case did anything wrong at all as we do not have the benefit of full facts but it will certainly make all advisers think twice about replacing policies and how the client is going to benefit.
These are just thoughts from an risk adviser just started in the industry.
On 29 July 2009 at 3:04 pm Philip said:
I see Russell has commented on the story too. You read his thoughts here http://chatswood.typepad.com/moneyblog/2009/07/campbell-live-and-sovereign.html On 29 July 2009 at 4:55 pm Blair Wingfield said:
All things being equal, if the client had fully disclosed then as Mayhew said the proposal would have been deferred. John Campbell did not or did not want to know what "deferred" meant as he bullied & blustered.
Had this been the case the client would have remained with AMP and although there would have been no CC, Trauma or Living Insurance benefit, he would have had a Terminal Illness claim.
Thank goodness the client filled out the prop rather than the Adviser.
On 29 July 2009 at 5:40 pm Warren G Duff said:
I did not see the programme so it is dangerous to comment other than to write. I understand all Life Offices have terminal benefits to their "Life policies" so pay on that benefit. If it was stand alone then clearly no benefit, but one should examine the possibility of a terminal claim. The advisor should now return to his photo copy of the proposal which will tell all.
Finally I had a truama and subsequent income claim/s with Sovereign. They settled withoutout challenge, exactly as one would expect.
My radar is now fully extended to see what happens.
On 29 July 2009 at 6:46 pm Philip said:
I could not agree more with the sentiments of Phil’s column and recently I sent a letter to the editor of Business to Business on just such a matter in response to one of their editorials . The letter to the editor was in the July edition of Business to Business and it is quite surprising the feed back that I had from various clients in support of what was said by me.
However to a point it is our own fault in that we occupy the flashest buildings (although only leased) the employees for the majority are well paid (and why should they not be) and we set ourselves up every time because /due to a person’s attitude on the day that the claim is submitted.
I have just a similar case now against an insurance company because they have declined a claim on a legitimate loss based on an assessors preconceived assessment of the events which led to the loss . Although the client is going to the insurance ombudsman the insurance company is still not backing down . It will/ may still go to Fair Go and the insurance company will be made Toast and at the end the insurer will have another black mark against it and will have to pay out in view of the public eye . Why do the insurance companies do this ?
I read the other day in an another management magazine that reputation of a company comes down to the people that are employed to do a job . The people in a company are the front line in the sight of the public. These people in the insurance world look after the interests of people 24 hours a day 7 days a week 365 days of the year and we are responsible to ensure that we have the insured correctly covered. What other job is there in the world that places this much responsibility on to a person and we can only cover what is provided in accordance with the terms and conditions on a piece of paper . It’s a contract .Its a legal document. It’s not a guarantee of payment .
It’s about time the insurance industry in New Zealand started to shout back at the buying public and be proud of what we do and how we do it .
But I think if we could be a little more quieter in the manner in which we portray our selves then life would be some much better, i.e: don’t have the flashest buildings don’t be seen to be still having the flashest parties. It does not help when individuals and industry are cutting costs to watch insurance company personnel have swanky parties and still enjoying the high life on their customers premiums and yet still be seen to be increasing the premiums. It does not reflect well.
Regards John
This is a comment from John Barley emailed in.
On 30 July 2009 at 1:38 am simon davies said:
Typical, insurance companies making fortunes while the little guy gets lead up the garden path by greedy "advisers" and then when he needs them they go running for the nearest out clause. It's simple, any loophole insurance companies can find they will exploit,the bigger the claim the harder they look...And yet they are still, along with the banks, racking up huge profits in a recession.
Gee times are real tough for them. I am weeping blood for the hard times those corporates are enduring.
On 30 July 2009 at 6:06 am Worker in a great industry (insurance) said:
One should not comment on the Sovereign case without the facts but on the face of it Sovereign acquitted themselves well and were in a difficult position.
Insurance provides a very important role in reducing risk in an uncertain world and the Campbell Live case highlights the need for insurance.
Underinsurance and voidable insurance are terrible problems and leave NZers exposed. More people need insurance (we need to deal with underinsurance) and less people need voidable insurance. By this I mean we need to educate people of the need for accuarte disclosure. The industry hates declining claims as it gives a great industry a bad name. Few claims are declined and this is great news often overlooked.
The key message is people need insurance and and it helps people deal with uncertainity (it is all based on Jevons utility theory one NZ insurance person talks about - insurance increases utility by reducing risk over a pool of risk averse lives). Companies do not like declining claims.
Insurance is based on trust - it is based on a promise to pay. We need the public to trust that we do pay as this will help with confidence and help deal with underinsurance.
When faced with non-disclosure an insurer is faced with a Prisoner's dilemna. If one does not pay one is causing personal grief to clients and undermining confidence in our industry (nobody wants to do that). But if one does pay then effectively all other customers who have disclosed properly are wearing the costs of the non-disclosure and that is not equitable either.
On 30 July 2009 at 10:18 am James said:
One point I would like to make is that it hasnt been disclosed how much AMP cover was replaced. If the policy was taken out at age 18 and he is now 53, thats 35 years ago.
No one will know how much cover was taken out 35 years ago but some might say that it is probably minimal relative to cover taken out 2 years ago.
On 31 July 2009 at 12:53 pm Ross Lindsay said:
Simon Davies needs to address the chip on his shoulder. If Insurance Companies are such monsters, what's he doing working in this business? To put it very simply, if the client had disclosed fully and truthfully, this discussion would not be taking place. In my 30 years in this industry I've experienced nothing but co-operation and fairness at claim time. Indeed I've had claims where the Insurance Company have agreed to pay claims which they arguably did not have to pay. Funny how that sort of thing never features on Fair Go or Campbell Live!! On 31 July 2009 at 12:57 pm Phil Sowman said:
Does anyone know what sum of money was involved? I saw the programme and was not convinced by Sovereign.
Even the email out to advisers didn't seem that clear as regards what the underwriting decision would have been if all information was known.
Unfortunately in these situations the insurer is never going to come out looking good and the lasting impression will always be the cold fish insurance company vs the very personable former client.
When will the insurance companies start to invest in some good media training so we all don't get the flack when an insurance company representative gets on TV and lets us all down.
On 31 July 2009 at 1:03 pm Ross Lindsay said:
Simon Davies needs to address his prejudice against Insurance Companies. If they're such monsters, what's he doing working in this business? To put it very simply, if the client had disclosed fully and truthfully, this discussion would not be taking place. In my 30 years in this industry I've experienced nothing but co-operation and fairness at claim time. Indeed I've had claims where the Insurance Company have agreed to pay when they arguably did not have to. Funny how that sort of thing never features on Fair Go or Campbell Live!! On 4 August 2009 at 1:06 pm Phil Menzies said:
I agree with Phil's comments in this blog. I did see Campbell Live and can say that Sovereign's representative acquitted himself well. This isn't easily done when being interviewed by a twit. Apparently according to JC (joke intended) we do much of our prospecting in 'the Pub'. Since I don't, and I suspect many of you don't either perhaps we should allocate all Pubs in NZ to say the members of the IFA. This can be done on a rotation basis say in 12 month cycles. JC simply confirmed that he doesn't understand the business.
As far as the client is concerned my educated guess is that he had one of the 'off the shelf' whole of life policies that AMP pedalled in those days. Every one I came across was either for $10,000, $12,000 or later $20,000 sum assured plus bonuses. So he was offered the option of spending the same premium on tens of thousands of term cover. And I imagine no matter what the adviser said at the time the surrender value of the whole of life policy was already 'spent' on something else! I do feel sorry for the client who decided to cash in something small but worthwhile to take out what would have been a much more realistic cover. Pity he didn't tell the full story on the application. Personally I don't ever complete an application these days. I just think its wise not to but the client is left in no doubt about the consequences of 'non disclosure'.
On 28 August 2009 at 5:38 pm Nola Walkinshaw said:
Just to bring another point to the table - should we not as a group be trying to approach the Finance Minister and the Sec Commission on bringing the directors of the failed finance coys to justice. I think if we are doing this on the clients behalf then we would be at least looking to try to help our investors Comments On 7 September 2009 at 6:35 am Darcy Sollitt said:
Time will tell is right. This case is another of the way Sovereign treat people when they claim. Sovereign duck and dive all over the place plus they play hardball.
The full facts are now emerging and it does not look good for Sovereign at all.
A number of years ago Sovereign did the same on the Paul Holmes Show and the CEO at that time Swanson said that there was Non Disclosure. I got involved and Sovereign paid. There was no Non Disclosure in that case and it was swepted under the carpet.
Fortunately I am acting for the Crofts and if you go to Pinnacle Lifes Blog you will see that the wheel is turning.
This case will not be swepted under the carpet and I believe that every New Zealander has the right to know that they may have a policy with Sovereign and yet it may be another case of being void.
Commenting is closed
|
|
Printable version |
|
Email to a friend |
I come across the situation far to often of Advisers replacing perfectly good cover for reasons other than in the Insured best interests. We insurance folk indeed have a good story to tell and also a few ethical questions to answer. Have we made this guys life better or worse from our intervention? Should we have allowed him to cancel his AMP cover? Should we have written a stand alone critical care / trauma contract to go with his existing life cover? I don't know the all the answers but one thing I do know, unless there are extraordinary circumstances I never cancel any existing cover. No can argue against, our stats on the longevity of in place cover being appalling.
I note from the Sovereign release 97% of claims are paid in full. Which leaves me wondering whether the other 3% of declined claims are further human tragedies, I expect so. Sure we have a great story to tell but it doesn't make me feel any better about how we failed this guy.
Yes it's up to all of us to tell the story and most importantly be there, with the claim cheque, when our client or their nearest and dearest need it.