Car insurance investigators slammed in ASIC report

Car insurance investigators slammed in ASIC report

Improved investigative interviewing practice recommended in ASIC report.

In the July 2019 ASIC report into car insurance claim investigations: “Roadblocks and Roundabouts: A review of car insurance claim investigations”, ASIC identified a series of recommendations for private investigators for insurance companies. The has required the industry to pay “urgent attention” to these deficits ahead of the planned updates to the General Insurance Code of Practice.

The ASIC report highlighted the inevitable conflict that will arise when trying to deliver customer satisfaction with the unenviable task of weeding out fraudulent claims.

Challenging as this task may appear for insurers some significant findings were made regarding current investigation practices and the impact on customers.

Whilst investigations will always be necessary, they should also be conducted with respect for the individuals involved and with an open mind as to the outcome. On both these measures, investigators were falling short of customer expectations.

Customers felt like criminals

The ASIC report identified that customers felt like they were treated like criminals when matters were investigated. Some of the behaviours that led to these feelings were:

  1. Conducting interviews like police interrogations: interviewing witnesses separately, sitting opposite witnesses and introducing themselves as former police officers;
  2. Challenging the consumer’s answers, by refuting accounts or relationship status, questioning why a person acted in the way they claim;
  3. Implying lying or fault in the tone of voice used;
  4. Asking the same or similar questions repeatedly in an interview with the intent of tripping up the witness;
  5. Suggesting alternative accounts of what happened, including conspiracy to defraud;
  6. Deliberately suggesting witnesses made statements in the interview which they had not made, with the intent of identifying inconsistencies.

Many of these methods indicate poor interview training and an adherence to American style bad cop techniques that have been proven to be successful only in getting witnesses offside and wholly unsuccessful at obtaining evidence.

Recommendations

The ASIC report makes a list of recommendations focussing on respect of the customers. This is not about pandering to customers first or ensuring a soft approach is taken against fraud. Respect for the subjects you are investigating is engrained in our legal system, we are all “Innocent until proven guilty”.

Interviewing practices

Subjects should be:

  • Interviewed face to face, only when the information cannot be obtained in a less obtrusive way;
  • Asked to participate and appointments scheduled in advance at a suitable time;
  • Given a choice of where the interview should take place;
  • Advised of how long the interview is likely to take;
  • Provided with support if the need arises, suspend the interview if necessary;
  • Provided a transcript of the interview as a matter of process;
  • Given breaks in the interview every 30 minutes;
  • Interviewed for no more than 90 minutes in a single sitting;
  • Interviewed for no more than 4 hours overall.
  • Treated respectfully
  • Not subject to intimidation or undue pressure
  • Treated with an open mind to the outcome

Requests for information

In addition to the report being highly critical of common interviewing practices, it also criticised investigators and insurance companies for unnecessary and unreasonable request for irrelevant information.

In one case study, Kathy and Dan’s story, they were asked to provide the names and addresses of all the people they had contacted over a specific time period and phone records in a specific format in addition to a demand to pay for their own criminal history checks to provide to the insurer.

The consequential recommendation from ASIC was that investigations could not make unreasonable demands for information without a written explanation as to why the information was necessary. This appears to comply with the basic requirement of evidence to be RELEVANT to the matter under investigation.

Why are insurance investigations missing this point? Perhaps because of a clause that may be found in some policies that enables insurers to decline a claim if the subject fails to provide information requested. The clause can be applied whether the information requested is relevant or not.

Many of these recommendations were echoed in the General Insurance Code Governance Committee, ‘Own motion inquiry investigation of claims and outsourced services’, which reported in May 2017. This report identified the necessity for investigators to undergo training on the General Insurance Code of Practice. It is expected that following the Haynes Royal Commission, updates the Code will be forthcoming.

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