Contributed by Joe Montero

The Commonwealth Bank finds the public outraged at their behavior.  They hire a company to investigate. This company reports that the Commonwealth Bank has done nothing wrong.

As the saying goes, you get what you pay for.

By all appearances, the government is not concerned. This is its mistake, because it won’t wash. There is a reason why those calling for an inquiry into the activities of the banks, insist that it must be independent. It doesn’t take a brains trust to work out that allowing the banks to organise their own investigation, is to ensure that there is a cover up. It is idiotic to believe that they would invest in something that casts them in a bad light. The failure to be seen to act properly will rebound on the bank and some of the mud will cling to the Turnbull government, for its failure to act.

The Commonwealth paid Deloitte quite a lot to do the job. Deloitte for its part, has an incentive to come up with the results that will be of use to its clients. After all, they want more business down the track and this is dependent on the reputation to deliver.

This investigation involved CommInsure, the bank’s life insurance division. Allegations had been made by CommInsure’s former chief medical officer that the life insurer was putting profits before people. Deloitte came up with it “did not identify any systemic issues relating to historically declined claims and did not identify any evidence that the current and planned improvements to the claims handling processes, are designed in a way that could systemically deliver poor customer outcomes”.

The report said that 797 or 20 percent of declined claims were investigated. Deloitte found that these claims were handled in a manner that complied with the “processes and procedures” used by CommInsure at the time.  Whether these processes and procedures were flawed and generated bad practices was not considered.

Not one single claimant or family member was interviewed. This is a serious omission for any investigation.

The former chief medical officer had alleged that CommInsure had been delaying and denying claims, including using outdated medical definitions, and that some claims managers were cherry picking doctors and leaning on doctors to change their opinions. He also alleged the potential tampering of files of the chief medical officers’ opinion data base.

Another case involves  a claim after the client had a heart attack. Payment had been denied to 46-year old James Kessel, because of the use of an outdated definition of a heart attack. There are many other cases where outdated definitions were used. By omission, Deloitte has ruled that this practice is legitimate.

In regard to “errors” made in processing claims, Deloitte admitted that there were some, but did nothing to quantify them, suggesting data limitations as the reason. Thus, the report failed to say, whether these occurred often enough to constitute a problem.

Nor, it seems, was there any investigation whether the bank had been making inappropriate incentive payments that encourage more applications to be knocked back, than would otherwise be the case.

Yesterday, the Commonwealth Bank released a two-page document, saying the Deloitte review along with two other reviews, by DLA Piper and Ernst & Young, were now complete. “Having regard to all of the work that has been completed, including the independent expert reviews, the board concludes there is nothing to support the concerns of willful or widespread misconduct”. Very convenient.

Note that the two other reports remain confidential.