Life insurance is supposed to be there when you need it, but that wasn't what some ill and permanently disabled clients of one bank experienced. Almost as concerning were the measures taken to stop their stories being told.

Normal text size Larger text size Very large text size For weeks, Dr Ben Koh, chief medical officer of the Commonwealth Bank of Australia’s life insurance arm CommInsure, had been trying to find the courage to call me. Koh had complained internally about serious ethical problems at CommInsure, and things had turned nasty. He knew it was only a matter of weeks, if not days, before he’d be marched off the premises. Desperate to speak to someone who understood the machinations of the bank, and knowing I’d written a number of stories on problems there already, he contacted me by email. “Is there a tel no. I can call to speak to you in confidence?” Koh wrote. He also called Jeff Morris and asked if they could meet urgently. Morris, a former Commonwealth Bank staffer who had in June 2013 gone public to blow the lid on forgery, fraud and a cover-up at the bank, was the country’s most famous whistleblower. Koh wanted his advice, and to get him to make sure I called back. It was July 8, 2015, and the public was getting used to scandals in the financial sector, having heard about serious wrongdoing not only at the CBA but at the National Australia Bank, Macquarie Private Wealth and financial advice group IOOF Holdings. Calls for a royal commission were getting louder, but federally, both Liberal and Labor were adamant the country didn’t need one. Koh hoped that his revelations might help change politicians’ minds. CommInsure life insurance claimants were knocked back despite being able to show their cases were legitimate. When I finally called him back, Koh sounded desperate. He told me he’d joined the bank in 2013 to run a team of medical professionals tasked with medical underwriting, claims and product advice. He’d been headhunted for the role after having similar experience at Westpac’s BT Financial Group. CommInsure had issued a press release touting his arrival. Koh was excited about his new job, as he’d been told the bank intended to do things differently. He would head up an independent medical team that assessed CommInsure customers’ medical underwriting application and claims rather than follow the industry norm of a non-medical person, often with only a high school certification, performing that medical assessment function. “I only made the decision to join them after I heard I was joining an independent unit – business risk – within CommInsure that was tasked with doing things better and the ‘right’ way,” he says now. “I carried that vision to my team and the motto I instilled in my team was – and also in all our email footers as a reminder – ‘The Medical Risk Team’s Core Value Proposition: Evidenced, Reasoned and Utmost Good Faith’.” Singapore-born Koh had grown up in a strict religious household and from an early age had been inculcated with morality and hard work. Educated at a missionary school, he joined the national army at 18, as is mandatory for Singaporean men, where his disciplined streak and sense of justice saw him quickly rise to the roles of captain and medical officer. It was here that he also did his first degree, in medicine. “My upbringing was discipline and doing the right thing,” he tells Good Weekend.


In 2003, Koh moved to Australia to study for a PhD at the University of Technology Sydney, where he explored the motivation and healthseeking behaviours of athletes, together with insurance. “For Paralympians, the issue of insurance became more prominent, especially during the time when various state civil liability acts were being enacted, ostensibly to reduce insurance premiums, but at a cost to claimants,” he says. He began to research the history, role and gaps of various types of insurance in society. When Koh took the job at CommInsure in 2013, he had a string of degrees to his name, including postgraduate master’s degrees in psychology and sports medicine, and was in the throes of studying law. Koh lived a simple life, working long hours at the bank, travelling between its plush head office in Sydney’s CBD and the outer western suburbs where CommInsure was quartered. A year after he joined, CommInsure got a new managing director, Helen Troup. Around that time, the business was restructured. This included subsuming Koh’s independent unit into the business’s underwriting team. The medical team now had to change reporting lines to report to the retail underwriting team, which it had previously been policing. “I immediately raised concerns about the new structure,” Koh tells Good Weekend. He says he raised concerns about what he saw as an “improper state of affairs” with CommInsure’s independent directors in November 2014. To protect himself, he invoked the internal whistleblower policy. During his time at CommInsure, he also raised many concerns with senior CommInsure executives. They included that the life insurer regularly “lost” files; that it spied on customers for the purpose of knocking back claims; and that it used outdated medical definitions to avoid paying out legitimate cases. Other concerns raised included managers cherry-picking medical opinions to get out of paying claims, using delay tactics to put off payments as long as possible, and requesting that Koh overrule colleagues’ medical opinions to reject claims. CommInsure executive general manager Helen Troup. Credit:Eddie Jim “It was a ‘profit is everything’ culture and it was coming from the top,” he says today. This did not sit well with his view of life insurance, which was that it was a contract of faith, purchased on trust and in the belief that if and when things went wrong, you would be covered. Around the same time as he spoke to me, Koh had coffee with Jeff Morris. The famous CBA whistleblower was rattled by not only what he heard, but by how Koh behaved. “He told me to sit on another table. When I asked why, he said, ‘Surveillance,’” Morris tells Good Weekend. “I said, ‘Are you worried the bank is spying on you, mate?’ I was dumbstruck when he replied, ‘No, they are likely to be spying on you.’”


I realised after comparing notes with Morris that if what Koh was saying stacked up, it had the potential to undermine confidence in Australia’s $44 billion life insurance industry. The public was by now well familiar with financial advice scandals and breaches of lending laws that had forced customers to sell farms, houses and businesses, even when payments hadn’t been missed. But spying and knocking back the legitimate insurance claims of sick and dying people showed how far the tentacles of malpractice had spread. In August 2015, Koh’s employment was terminated. He was told he’d breached the bank’s IT policies by forwarding work files to his personal email account – an action he’d taken because he was concerned the files would go missing. He says he’d been given approval to do so by his then boss, and that everyone did it. He believes the real reason is that, due to his internal complaints, he’d been identified as a troublemaker. He was initially given the option to resign and take a payout, but it required signing a gag order. “These people do not understand that you can’t buy integrity,” he tells me. “I walked away and told myself, ‘I don’t need your money. I’m not going to be silenced by your gag order. And you can choose to say whatever you want to my colleagues. I have no control over that. But damn if I’m going to be silenced.’” Koh wasn’t quite ready to go public, however, and convincing him to speak out wasn’t easy. I knew any story I wrote would be more powerful if he revealed his identity, so I kept on at him, pointing out that he didn’t plan to go back into the industry. I knew Koh was toying with the idea of suing the bank for wrongful dismissal, so I introduced him to John Berrill, a lawyer who’d recently resigned from class action law firm Maurice Blackburn. I also brought in then Nationals senator John “Wacka” Williams, who’d been calling for a royal commission into the banks since he first met Jeff Morris in 2013. When I told Williams about CommInsure, he was outraged: had CBA learnt nothing from the 2014 Senate inquiry into its financial planning division and the performance review of the corporate regulator, the Australian Securities and Investments Commission? He was now more convinced than ever that it was time for a royal commission. Fortuitously, around this time I received a cache of internal CommInsure documents and emails, some from a fake email address, some in an envelope, that backed up what Koh was saying about the culture and antics inside its claims department. The leaked documents were not from Koh, but he confirmed their veracity. They included heated emails between doctors and CBA claims managers over customer claims; reports of files going missing; and written complaints that doctors were being pressured to change opinions to avoid payouts. Koh agreed to appear on Four Corners and let us use his full name and position, but asked that we film only the back of his head. Other documents revealed the bank was using outdated medical definitions in its insurance policies, including for heart attacks, cancer, strokes and rheumatoid arthritis, which made it harder for legitimate claims to be paid out, resulting in more profits for the bank. Following a report of a rise in bladder cancer claims, a team was asked to tighten its definition of the illness, but in such a way that it would not attract the attention of the ratings agencies (which use formulas to compare benefits with premiums and work out a value-for-money measure), which might lower CommInsure’s ratings.


One email written in October 2014 was from Koh to Helen Troup, to inform her what was going on. It left no doubt about the way CommInsure was treating the sick and dying: “You cannot fake an organ failure. Nor is assessment on this contractual basis, expressly or implied so, in my opinion fair or reasonable.” The email had been written after a claims assessor had complained that one of the doctors recommended the approval of a claim for total and permanent disability (TPD) for a customer suffering kidney failure. The assessor was arguing that the doctor had gone beyond the brief she’d been given. “I’m worried that by taking the stance that this member is TPD, we are opening the gates for insureds/trustees to argue that members may be TPD even when they are awaiting or undergoing curative treatment,” the claims assessor said to Koh, who had been asked to override the original medical officer’s opinion that the claimant was TPD. “There were so many terrible things going on,” he recalls to Good Weekend. “They didn’t care about people. They worked with paper and they didn’t see the impact of what they were doing. How can someone with TPD be rejected for a claim on the basis they are on a waiting list for an organ transplant when that transplant may never come up? It is ludicrous and unethical and I had to speak out.” The overwhelming message was that CommInsure would generally do all it could to delay, deny and, if all else failed, litigate claims. It reminded me of CBA’s treatment of another customer, Noel Stevens, who spent the last six months of his life fighting the bank after it rejected his life insurance policy two days before Christmas 2011 on the basis he was dishonest. It said he had lied about the amount of alcohol he had drunk after trawling through his credit card details and matching them against his medical records. It was a David-and-Goliath battle: a dying man with $10,000 to his name taking on a multibillion-dollar corporation in the courts, giving testimony from his bed while he was high on morphine to dull the pain, to fight for something that was rightfully his – an almost $300,000 insurance policy payout that he wanted to leave to his daughter. Days before he died, Stevens won the case and the bank was ordered to accept the claim. As his daughter, Teghan Couper, was arranging her father’s funeral, she was told CBA was appealing the decision. Teghan fought the bank and won the appeal in 2013. This tragic yet ultimately inspiring story demonstrated to me how far the so-called venerable institution, CBA, was prepared to go to avoid paying out a valid life insurance claim – the bank pressed on even after its legal costs overtook Stevens’ claim total of almost $300,000. It was a clear case of valuing profit before people. What became apparent was the role senior executives had given to claims managers. Despite limited training and lack of medical degrees, they were the ones who decided when to ask a medical officer for an opinion and what medical information should be provided to that officer. And there was evidence in the documents that the remuneration of some claims staff was linked to key performance indicators such as net loss ratios – the ratio of paid insurance claims to premiums earned (for instance, $80 in claims for every $160 in collected premiums produces a loss ratio of 50 per cent). Between the documents and Koh’s testimony, CBA had a lot of explaining to do. I read through the documents and pored over numerous cases showing terrible treatment of customers by the insurer. One case that choked me up – and did so again when I reread it – was of a middle-aged man in rural Victoria who worked as an accountant, who made a total and permanent disability (TPD) claim following a diagnosis of motor neurone disease. This terminal illness affects the nerve cells controlling the muscles that enable us to move, speak, breathe and swallow, and leads to a horrific and painful death. The treatment of him by CommInsure was ghastly. I decided not to publicise the story at the time but it haunted me for years. The man had lodged a claim and was given the runaround as he was grappling with his health. Eight months after his diagnosis, one of his doctors sent a letter to CommInsure describing his condition as rapidly deteriorating. The patient’s arms and hands were paralysed, he couldn’t walk and he might not survive the next few months. The response from CommInsure was unconscionable: “We are unable to do this calculation at present. We would first need to receive and assess the TPD claim and ensure he meets the criteria to receive TPD before we can look at a possible calculation.” A relative of the man then hired a lawyer, who fired off an email to the senior claims manager saying, “Your behaviour towards our client is inappropriate and appears even malicious.” Four months later the lawyer was still trying to get a payment from CommInsure, which continued to drag its heels. By this stage the man was bed-bound, couldn’t swallow, speak or move his head. A letter sent by a doctor to the man’s lawyer said, “Psychologically he is distressed, depressed and naturally frightened by his condition. He is ventilated … His prognosis is extremely poor. I believe that sadly, it is unlikely that he will live for more than a few months.” Yet still CommInsure delayed the payment. It was only after he died that the bank finally paid out to his family.


Another case that disturbed me was that of James Kessel, a 46-year-old diesel mechanic, who had lived all his life in the tiny northern NSW town of Wee Waa. Kessel had had a heart attack in September 2014 that was so severe his heart stopped and nurses had to restart it using a defibrillator. Yet the bank denied his trauma policy claim because he didn’t have a high enough level of a protein called troponin I in his blood. (A particular level of troponin I indicates a heart attack has occurred.) CommInsure denied a payment to heart attack victim James Kessel in 2014 based on old, outdated medical result benchmarks. Credit:Matt Miegel Kessel was dirt poor, living in a tin shed and trying to scrape together a living when I went to meet him. He was single and working odd jobs. He’d taken out a life insurance policy with CommInsure more than 25 years earlier and had faithfully paid premiums for a trauma policy which should have covered him for $1 million if he had a life-threatening illness such as a heart attack. What he didn’t know when I met him was that the troponin I level accepted as indicative of a heart attack had changed more than a decade before, yet, as evidenced in the documents I had received, CommInsure had continued to use the old, higher measure as its benchmark – which resulted in legitimate claims like Kessel’s being denied. Indeed, Ben Koh had conducted an internal audit of heart attack claims and found that more than half of legitimate claims were being knocked back because of the bank’s use of the outdated definition. When he presented the report to CommInsure executives, it was ignored. I pitched the story to The Age, Sydney Morning Herald and Four Corners, suggesting I work on the program with Klaus Toft, the producer who’d worked with me on a wage fraud exposé of convenience store giant 7-Eleven in 2015. At this stage Koh was still deciding whether to go public, but it didn’t matter. I had enough to proceed and it was too important to ignore. I was also hopeful a high-profile TV report might bolster the case for a royal commission into the banking sector, given the mounting scandals. With Malcolm Turnbull having recently taken over from Tony Abbott as PM, I thought there was a chance the Coalition might change its stance on this issue. After Four Corners gave me the go-ahead, James Kessel was one of the first people who agreed to be interviewed. We flew to Wee Waa in January 2016. Kessel showed me the letter dismissing his claim. “They sent me a letter, which … simply states, that, ‘Your troponin levels were not at the right level so you don’t get it.’ Goodbye. Have another heart attack. Better luck next time.” As the camera rolled, I showed Kessel internal bank documents reporting that his case had been escalated to an internal CommInsure committee meeting in December 2014, days before his claim had been rejected. The committee trawled through four years of his medical records trying to find a reason to reject his claim, but decided he had disclosed everything. “The sole reason the insured does not satisfy the policy terms is due to him not reaching the troponin I threshold, which is not in line with current medical practice,” an internal email said. The email also warned that if the decision was disputed it would attract negative attention from the Financial Ombudsman Service. “We recommend that the committee consider this claim for ex gratia payment and that the committee also discuss the amount to be paid.”

Advertisement