No one sacked in CommInsure scandal: Ian Narev

Ian Narev has revealed no employees were fired for denying life insurance claims at CBA’s insurance arm.

CBA CEO Ian Narev leaves the public hearing.

Ian Narev has revealed no employees were fired for denying life insurance claims at the lender’s scandal-hit insurance arm Comm­Insure.

At the parliamentary inquiry into big four banks yesterday, the Commonwealth Bank chief said some workers had suffered remuneration penalties but none had been let go from the CommInsure division, which was wracked by revelations of poor claims processes and cases where doctors were pressured to deny claims.

“There are certainly individuals where we know enough about them that they’ve had some consequences related to remuneration but at this stage we have not had individuals terminated because of this because we’ve not seen the need to do that,” Mr Narev said.

“If people are accountable they will be held accountable,” he added.

Several times during the proceedings Mr Narev admitted the bank had breached faith with its customers.

“We have done wrong by some customers in that business and other businesses,” Mr Narev said. “The goal is to put things right.”

Ahead of the inquiry, CBA released an update of the independent review into CommInsure, which was again the subject of media reports on Monday ­evening.

Peta Outzen, a CommInsure customer who died from an accidental overdose in May 2014, had been allegedly denied a claim on her accidental death cover.

Mr Narev said he was concerned by the story and that the bank had now gone through more than five million documents and independent experts, including KMPG and EY, had not found any evidence of medical files being tampered with or deleted, and that the assertions of a lax response to internal complaints were unfounded.

The independent review also conducted more than 60 formal interviews since the scandal first broke in March.

Liberal MP David Coleman, who is chairing the inquiry, requested those documents be filed with the committee.

CBA has now paid 17 customers whose claims were recently made eligible by retrospective changes to medical definitions. The outdated definitions of heart attack and severe rheumatoid arthritis were at the focus of numerous customer disputes.

Labor MP Matt Thistlethwaite accused the bank of using an outdated definition of rheumatoid arthritis from the 1940s and said it represented “sneaky, unethical behaviour”. CBA chief risk officer David Cohen refuted the claim but said the lag in updating definitions was a problem.

“Definitions did need to be updated and this had been carried out from mid-2015. There can be a lag between medical knowledge advancements and medical definitions,” Mr Cohen said.

As part of the independent review, CommInsure has backdated reviewed definitions to May 2014. The bank has committed to more regular definition reviews and is assessing 38 other customers who may be eligible for payout under the retrospective changes. CBA has written to about 630,000 customers to inform them of the changes.