Claims involving a death

Insurer claims and conduct assurance program

November 2023

1. Introduction

The NSW Compulsory Third Party (CTP) insurance scheme is established under the Motor Accident Injuries Act 2017 (the Act). In conjunction with the Act, Guidelines support the delivery of the objects of the Act by establishing principles and requirements to ensure timeliness, fairness, transparency and better outcomes and experiences for injured people accessing the CTP scheme. The Act and the Guidelines also set out the requirements relating to the management of claims involving a death as a result of a motor crash in NSW.

The State Insurance Regulatory Authority (SIRA) is the independent regulator of statutory schemes in NSW, including CTP. In line with Division 9.1 of the Act, SIRA has issued licenses to six insurers who operate within the scheme. These licenced insurers are required to adhere to the duties and obligations placed on them under the Act, Guidelines and the conditions of their licence. SIRA has a statutory function to monitor the compliance of the licensed insurers and authority to publish information about their level of compliance with the duties and obligations imposed.

In accordance with its SIRA 2025 purpose and objectives, SIRA is focused on improving the outcomes and experiences for people who make a claim as a result of a death. Informed by lived experience feedback and the 2021 Statutory Review into the NSW CTP legislation, SIRA has implemented a strategy which included the following outcomes relevant to this activity:

• People who are impacted by a death following a crash have access to support and information regarding the claims process and their entitlements.
• Insurers manage claims related to a death proactively, respectfully and in a sensitive manner.
• Insurers act in accordance with the legislation, the relevant Guidelines, licence conditions and the Customer Service Conduct Principles.

In January 2023, SIRA updated the Guidelines to introduce further insurer obligations for managing claims related to a death in response to lived experience feedback. In accordance with its statutory functions and pursuant to Section 10.24 of the Act, SIRA undertook an Insurer Claims and Conduct Assurance Program (ICCAP) activity to ensure that licensed insurers were meeting their obligations as it relates to the management of claims involving a death.

The activity was conducted in two stages:

• Desktop review
• Claims file review

This report outlines the findings of the ICCAP on the information provided by insurers and access to their claims management platform. SIRA notes and appreciates the licensed insurer’s engagement and transparency throughout this activity.

Separately, SIRA would like to acknowledge and note appreciation for the lived experienced engagement and feedback provided by the NSW Road Trauma Support Group members.

2. Desktop review

A desktop review was conducted to understand insurers systematic approach to ensuring compliance with their management of claims involving a death, leading to a supported and respectful claim journey.

Insurers were requested to provide information demonstrating how their claims management model supports injured people who make a claim involving a death and complies with relevant obligations.

Key themes from the desktop review included:

• Each insurer had their own triaging or segmentation model to respond to claims involving a death.
• Most insurers provided evidence of claims procedures which identified actions and key escalations for managing claims involving a death. It was only evidenced in limited circumstances that the procedure documents referred to the updated Guideline principle-based requirements and an attempt by the insurers to ensure that these were considered and understood by their claims managers as part of their case management model.
• There was evidence from some insurers of specific training materials that are used to onboard and upskill claims staff in managing claims involving a death.
• A limited number of insurers provided copies of outbound letter templates that are used for providing information and key claim related decisions. Some insurers correspondence to claimants used language that is known to be potentially triggering or re-traumatising to this cohort of claimants.
• Some insurers claim management models utilised specialised support services to assist with trauma and grief support and connection of services.

SIRA expects insurers to conduct activities to improve their systems and claims management model in response to their findings from the ICCAP.

3. Claims file review

3.1 Overview

3.2 Results

Scheme

The insurers demonstrated an overall average file review result of 76%. The review criteria comprised two main elements, Compliance and Customer Service Conduct Principles. As a collective, the insurers scored 78% and 63% respectively in these areas (see Figure 1).

Figure 1: Scheme results

* Where non-compliance is identified, SIRA determines appropriate regulatory action to improve performance in line with its Regulatory Framework. See section 4. Regulatory response.

Insurers demonstrated the strong systemic compliance against criteria two at 98%, ensuring that the notice which communicates the liability decision for statutory benefits after the first 26 (or 52) weeks was provided to the claimant within the legislated period of 3 (or 9) months¹ after the claimant makes the claim. It is noted that insurer compliance for both statutory benefit liability notices were substantially communicated within the legislative timeframes with a combined compliance performance total of 94%.

In respect of criterion three, insurers demonstrated sensitivity towards individual circumstances and identified documents to be withheld, noting to the claimant that they contained potentially traumatising information. With regards to criterion ten, insurers demonstrated the ability to comply with the requirement to respond to requests to concede entitlement to non-economic loss/degree of permanent impairment within legislated timeframes. Both criteria scored 100% compliance, with SIRA noting a lower applicable sample size applied to these criteria.

The lowest area of compliance was demonstrated against the insurer's adherence to criterion five, being the prioritisation of liability decisions to minimise delay and uncertainty for a claimant, with a score of 39%. Whilst decisions were substantially made within legislative timeframes, not all decisions were prioritised. It was identified in many instances that insurers had the information on file that was used to make a liability decision for a long period before the decision was made and communicated, leading to unnecessary delay and uncertainty for claimants.

In relation to the Customer Service Conduct Principles, key issues identified related to the insurers alignment with:

• Principle 1: Be easy to engage and efficient
• Principle 3: Resolve customer concerns quickly, respect customers’ time and be proactive

Figure 2: Scheme result by audit criteria (refer to Appendix 1 for criteria detail) * criteria 3 & 10 contained low sample volume < 10-claims.

The levels of overall compliance did not meet SIRA’s expectations and subsequent regulatory actions have been taken to achieve better outcomes and improve experiences for the individuals interacting with the CTP scheme. Actions based on the findings from this ICCAP are listed under section 4. Regulatory response.

Insurer

At insurer level, Allianz received the highest overall score and compliance score of 91% and 92% respectively. Allianz and QBE both scored the highest result in relation to Customer Service Conduct Principles (80%).

Youi recorded the lowest overall score of 66% and the lowest score in relation to compliance (69%). It is noted that Youi became a new entrant into the scheme in December 2020 and did not have prior organisational experience in managing claims involving a death comparative to other insurers.  NRMAI recorded the lowest score for Customer Service Conduct Principles at 40%.

Figure 3: Insurer results

3.3 Observations

• There were identified opportunities for insurers to improve the tailoring of their decision notices and correspondence, being sensitive and respectful of the claimant’s circumstances and ensuring there is no conflicting messaging.
• As a result of trauma, claimants do not always understand the information provided whilst dealing with grief. There is an opportunity for insurers to consider the lived experience feedback in respect of being proactive and repeating and reminding claimants of their entitlements throughout their claims journey in a sensitive and respectful manner.
• Specifically, there was identified opportunities for insurers to improve proactivity in screening and providing support to claimants that may require assistance with activities of daily living (ADLs) as a result of the injury sustained.
• Liability decisions (both decisions on a claim) were generally made within the compliance timeframes, as was the commencement of weekly benefit payments within 10 days of liability acceptance.
• There were observed instances of good practice where insurers initially withheld documents containing potentially sensitive information and advising the claimant. Where the claimants requested the release of the documents, the insurers subsequently offered to engage with the claimant’s treating providers with the aim of sending the documents directly to the treatment provider to ensure the claimants were supported when receiving and viewing this information.
• There were some positive examples of insurers proactively engaging with claimant’s treatment providers with the aim of facilitating timely requests and approvals for the commencement of treatment and reducing the administration burden on claimants. This is still an area more broadly for insurers to focus on to uplift their case management capabilities to proactively engage with the claimants treating team to ensure the claimant is receiving appropriate treatment and care support through the scheme.
• There was evidence of insurers considering individual circumstances and making proactive decisions specific to late claim lodgements.

4. Regulatory response

All insurers were provided with an individual report from the ICCAP activity outlining their results, details of non-conformances and required actions.

Based on the findings of the management of claims involving a death ICCAP, the following actions will be undertaken:

• Action 1: Where required, insurers are to develop and implement a remediation plan to respond to the findings of the insurers ICCAP activity and ensure systematic compliance is embedded. The development of the remediation plan and associated reporting requirements must be conducted in line with SIRA’s remediation plan expectations.
• Action 2: SIRA will monitor the implementation of the remediation plans on a monthly basis. Remediation plan requirements will be monitored until SIRA is satisfied that substantial compliance is being achieved.
• Action 3: SIRA will consider further independent assurance activities based on risks presented by each insurer.
• Action 4: SIRA will review the Guidelines to determine whether changes are appropriate to deliver improved outcomes.
• Action 5: SIRA will consider further regulatory action in relation to specific insurers who demonstrate ongoing non-compliance in the management of claims involving a death.
• Action 6: SIRA facilitated ‘Trauma-informed care’ education sessions with insurers in September 2023 to assist in improving case manager capability in managing claims involving a death.

Appendix 1 – Review criteria

¹The Motor Accident Amendment Bill, 2022 amended the timeframe for insurers to make the second liability decision (statutory benefits after 52 weeks) from three months to nine months after a claim is made, effective 1 April 2023.