WHEN BUYING INSURANCE, WHICH WAY TO GO?

Whilst it’s true to say that the TV ads of the Direct Insurance Marketers are very ‘catchy’ and ‘humorous’, prospective buyers of these classes of insurance from these vendors should be aware that the product being promoted is actually ‘protection’: protection of the livelihoods, incomes and assets of individuals and businesses. Not something to be treated lightly.

Generally, the Direct Market will promote their offerings on a ‘price’ model and whilst this is always part of any consideration, claims service and Policy Wordings and Conditions are of equal importance.

If only the quality of the coverage provided by the Direct Insurance Marketers was as comprehensive as their advertising campaigns.

This is where an Insurance Broker adds value to the purchasing proposition. The insurance broker’s role is to ‘canvas’ the ‘market’ with a view to obtaining a recommended ‘product’ that is appropriate to the individuals needs, taking into account any specific requirements. Additionally, many brokers are members of insurance Cluster Groups and these have policy wordings that are far superior, and ultimately of more benefit to the buyer, than that of the Direct Insurers.

WHICH ONE FOR WHAT PURPOSE?

As the dust settles on another financial year it is worth looking at some issues that continue to have an element of confusion for all concerned. One of these is the role of an insurance broker in relation to two widely used industry documents – the letter of appointment and the letter of authority.

The purpose of each is for a consumer to approach another broker to act on their behalf. One form, the letter of authority, is an instruction to make enquiries, while the other, the letter of appointment, is a transfer of business from one brokerage to another. These documents are often confused. Use the wrong one and clients may be under the impression that they are merely seeking an alternative quote, only to find they have transferred their portfolio of business to another broker.

The Letter of Authority is a document that may be used in the following examples: the consumer is looking to get an alternative quote via another broker; or if they would like a broker to make enquiries on their behalf, a situation that may occur during a difficult claim. Its purpose is that the instruction from the client is clear and transparent with all parties. This is important to protect privacy and avoid misrepresentation. The document must be signed by the business owner or appointed authority to do so. At this early stage of a possible new broker/client relationship, the broker is not allowed to receive commissions or fees for their services.

The Letter of Appointment is a document that has a clear intent for another brokerage to take over existing business. It would include claims maintenance and credit control. This document authorises the broker to accept commissions and fees for service within the standards set by AFSL licensing requirements.

Both documents have clear, separate intentions but can cause a great deal of confusion if not used correctly. Please contact your broker for guidance in selecting the appropriate document to suit your needs.

WORKCOVER CLAIMS QUESTIONED

Employers are sometimes faced with a situation where they disagree with a decision of WorkCover to accept a claim for statutory benefits made by one of their employees who allege that they have been injured during the course of their employment. The employer may disagree with the acceptance of the claim for a variety of reasons, including a belief that the claim is fraudulent or that the injury did not actually occur at work.

Many employers do not appreciate that they have a right to challenge such a decision. If an employer is unhappy with a decision made by WorkCover on a claim they can seek to have the decision reviewed by the Workers’ Compensation Regulator. Conversely, an employee whose claim is rejected can also seek a review of the decision.

The Workers’ Compensation Regulator is a body independent from WorkCover Queensland and is required to impartially review decisions made by WorkCover.

There is no cost involved in having a decision reviewed by the regulator, other than, of course, if the employer chooses to engage legal representatives to assist them with the review application.

Once WorkCover has made a decision on the claim the employer is entitled to ask for written reasons for the decision within 20 days of being notified of the decision.

WorkCover has five business days to supply the employer with the written reasons for the decision. The employer then has 3 months from the date of that letter to apply for a review with the regulator. The employer is entitled to provide the regulator with additional evidence it wishes to rely on in support of the review application.

The regulator has 25 business days to hand down a review decision unless an extension has been agreed upon. The employer has a “right of appearance” on the regulator during the review process, which can either be done in person or over the phone. It is not necessary to have legal representation during the review process.

If either party is unhappy with the ultimate decision of the regulator they can appeal the decision to the Queensland Industrial Relations Commission. The regulator will normally appoint legal representation to defend their decision in the Industrial Relations Commission. Should the worker appeal the review decision the employer needs to apply to the Commission for the right to be heard on the appeal.