ACCC authorises life insurance industry to ensure policies cover frontline coronavirus workers

The Financial Services Council sought clearance to ensure policies would not exclude frontline health workers and other first responders. Picture: Jonathan Ng

The life insurance industry is the latest member of Rod Sims cartel club having received authorisation to ensure its members agreed to cover health professions and frontline workers for coronavirus.

The interim authorisation is similar to those handed to everyone by the Australian Competition and Consumer Commission (ACCC) from shopping centres to supermarkets and health insurers to allow co-operation amid the virus downturn.

The authorisations are aimed to be short-term, can be revoked at a moment’s notice and are subject to ongoing review pending formal notification.

This is the difference between Australian and New Zealand law with the latter not having the ability to issue interim orders.

This means the NZ Commerce Commission took the extraordinary step of issuing a statement saying it would not intervene where co-operation was taking place in an industry sector provided it was for the short-term.

It added a rider that it would be quick to act if the general clearance was abused.

Australia at least has more formal control over events.

Some life insurance policies don’t cover pandemics and others reportedly exclude coronavirus for the death policies.

The Financial Services Council sought clearance to ensure policies would not exclude frontline health workers and other first responders and also that they would not be charged more for their policies.

The mere fact such agreement is necessary makes you wonder about the insurance industry.

If one company didn’t provide cover then that might be considered a competitive disadvantage, which would mean it would lose business.

But it seems by mandating this cover, the FSC is attempting to ensure as wide a coverage as possible, which on paper is no bad thing.

If any company was worried that joining the coverage club might risk legal claims on competition grounds, then they have been cleared by this authorisation.

The ACCC is being flooded by such requests, which itself highlights the extraordinary economic climate, but is also a source of concern because the more government intervenes the harder it is for that support to be turned off.

Virgin Airlines on Tuesday went into a trading halt with the clear threat that without government support it won’t be re-emerging.

Government is underwriting wages for millions of workers that companies have stood down. One day this tap will need to be turned off.

The question is how?