Cedric Stephens | What is the FSC doing to tip the scales more evenly?
Today's article was sparked by two pieces by Gleaner reporter Livern Barrett. The first was published on November 10. It was titled: 'Lawmakers want Gov't to examine certain practices in insurance companies.' Government and the Opposition, it read, should "commence an ... investigation of local (sic) insurance companies that ... are demanding that policyholders, including pregnant women and persons with cancer, upfront the cost (sic) of their medical treatment." Companies that provide these types of coverage are owned mostly by foreigners.
The call was made in the Senate. Government and opposition Senators Saphire Longmore and Sophia Frazer-Binns, respectively, raised the subject. They are trained professionals. One is a medical doctor and the other an attorney-at-law. Their opinions were said to be informed by "personal experiences". Mr. Barrett's job is to report what the senators said. As a result, he provided no clues as to why the apparently independent decisions to speak about this matter were limited to 'personal experiences' and not representative of a wider group.
The careful reading of newspapers - especially this one - should be part of an obligatory routine for ALL our officials. Shouldn't their remarks to Parliament be informed by facts that appear in this and other media and be the products of research? If Dr Longmore or Mrs Frazer-Binns had done a few Google searches in relation to the insurance problems faced by local insurance buyers, their arguments for an investigation into the practices of an industry that collected premiums of $75 billion in 2016 and wields considerable power and influence would have been much stronger.
Mr Barrett's second article appeared two days later. Among his sources were "former star athlete-turned-politician" Juliet Cuthbert-Flynn, Alando Terrelonge, and Leslie Campbell - all first-time members of Parliament. It discussed lawmaking in parliament, the MPs' expectations, and the quality of debates. "Not robust," "rather parochial," "boring," "not impressive", and "not making things happen for the country" were some of the diplomatic terms they used to describe the contributions of some of their colleagues. Add to that list insufficient preparation, as was indicated previously.
Senators Longmore and Frazer-Binns should still be congratulated for bringing the matter to the attention of members of the Upper House. It may be of interest to the two senators to learn that on September 14, 2016, the Australian Senate referred an inquiry into the life insurance industry to a Parliamentary Joint Committee on Corporations and Financial Services. The original deadline for the report was June 30, 2017.
The terms of reference for the inquiry were to: "a) investigate the need for further reform and improved oversight of the life insurance industry; b) assess the relative benefits and risks to consumers of the different elements of the life insurance market ... c) find out whether entities were engaging in unethical practices to avoid meeting claims; d) assess the sales practices of life insurers and brokers ... d) determine the effectiveness of internal dispute resolution in life insurance; e) review the roles of the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority (the FSC equivalent) in reform and oversight of the industry; and f) investigate any related matters."
The committee conducted extensive consultations. It released a comprehensive report in March 2018. Topics addressed included consumer protection; code of practice; remuneration, commissions, payments and fees; retail life insurance; group life insurance; access to medical information; genetic information; and claims handling. The problems that pregnant women and cancer patients in Jamaica face represent only the tip of the iceberg. They are examples of a range of problems that consumers, as a whole, face - a fact that the Australian senators recognised.
Senator Longmore, a breast cancer survivor, asserted in her speech in the state-of-the-nation debate on November 9, that "many persons are being denied access to care by insurance providers on the grounds that there is no coverage for their stated illness or that there is a newly recognised limit on their coverage". Her statement was made during the same week that Dr Alfred Dawes wrote movingly about the struggles of Kinte Mendez, a terminal cancer patient. His claim was initially denied due to a wrong diagnosis by the insurer's medical adviser. That decision was reversed without an apology to the dying policyholder but before the release of a nearly $30 billion profit report by its parent company.
Senator Frazer-Binns, according to Mr Barrett, urged government action. "Government," she argued, "does not generally interfere in the operations of the private sector ... (It) has a duty to ensure that the private sector operates in a way that is balanced and fair to citizens." Wrong on point number 1 and correct on point number 2. However, had she taken the time to read the Financial Services Commission and Insurance Acts before making her statement to the Senate, she would, in the words of MP Cuthbert-Flynn, have gone some way in helping to "make things happen for the country."
I cite examples of questions that she could have raised in her address to the Senate, assuming that she took the time to do her homework and read the September 9, 2018, issue of this newspaper, "Finally, insurance reform with upsides for the consumer".
What action is the Financial Services Commission taking to tip the scales more evenly in transactions between insurers and policyholders?
a) What is the status of the proposed market conduct reforms that the commission announced in September? b) Do they address any of the issues raised in this debate? c) If not, why not? and d) When will the reform measures be implemented?
Matters relating to risks and insurance can be boring and complicated yet they affect the lives of citizens in profound ways. If the senators or MPs require free, independent apolitical information or advice on these matters, please contact me. I would be happy to oblige.
- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel write to email@example.com.