Australia

CBA knew medical definitions were outdated

The scandal over CBA's CommInsure has been raised again, this time at the banking royal commission.

CommInsure misled an ombudsman about a case centred on its definition of a heart attack, an inquiry has heard.

The Commonwealth Bank resisted admitting it was not open and frank with the Financial Ombudsman Service, after a man who suffered a heart attack complained about his insurance claim being rejected.

But CommInsure managing director Helen Troup told the banking royal commission the bank did in fact mislead FOS and should have acknowledged that in a letter last year.

"The letter should have acknowledged the mistakes that we made through this complaint," she told the inquiry on Wednesday.

She agreed CBA should have acknowledged it was not open and frank in its dealings with FOS.

CommInsure faced a scandal in 2016 over the use out-of-date medical definitions.

An ASIC investigation found CommInsure had not broken the law but there were a number of areas of concern where improvements needed to be made.

It concluded CommInsure's trauma policies had medical definitions that were out-of-date with prevailing medical practice, specifically for heart attack or severe rheumatoid arthritis.

CommInsure subsequently updated the definitions.

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