Unnecessary red tape separating health and life insurance is preventing life insurers from creating better outcomes for consumers, according to BT Financial Group.
Speaking yesterday at an event run by the Banking and Finance Oath, an initiative from charity The Ethics Centre, BT Financial Group chief executive Brad Cooper said better regulation can come about for consumers if current insurance regulations are better harmonised.
As an example, he cited how differences in regulation between health insurance and income protection are preventing good outcomes for consumers.
“If somebody is covered with income protection and there’s a major accident and they need knee surgery, if they don’t have private health insurance, then they’re waiting for quite some time,” Mr Cooper said.
“As an income protection provider, it would be beneficial to us and to the claimant for us to simply pay for that knee surgery, to get them fixed quick and get them back to work.
“But under regulation, you can’t do that because [of] the crossover and the differences between income protection and health.”
Mr Cooper said since the Global Financial Crisis in 2008, there have been around 39 probes into financial services, with 22 of them complete and 17 still under way.
He said all of these inquiries come with a public airing or issues, recommendations and new regulations, and many of them are not unique.
“Then you get inquiry on top of inquiry with recommendations still not implemented from the last one and, therefore, the next inquiry is a similar set of facts to the last one,” Mr Cooper said.
“It’s clear the regime does not work for consumers, and I know there’s lots of work under way at the moment to try and simplify that.”