The Australian Securities and Investments Commission has concluded that, while CommInsure should be treating its customers better, it has not broken the law.

Key points: ASIC found no evidence of undue pressure on doctors to change their opinions

ASIC found no evidence of undue pressure on doctors to change their opinions No evidence that customer records altered or deleted inappropriately

No evidence that customer records altered or deleted inappropriately CommInsure used out of date and "out of touch" medical definitions that resulted in some claims being denied

The findings were prompted by a joint Fairfax and Four Corners investigation that alleged a culture within CommInsure whereby doctors were pressured to change their assessments to avoid life insurance payouts, while patient files mysteriously disappeared.

Four Corners also reported that, on multiple occasions, the bank had forced employees to be "ill-health retired" due to a medical condition, but refused to grant their life insurance claim on the grounds that they could possibly recover in the future.

ASIC said it found no evidence to support the allegations that CommInsure claims managers applied undue pressure on doctors to change or to alter their medical opinions.

It also found no evidence that the medical records of CommInsure customers had been deleted or altered in any inappropriate way.

However, it did conclude that CommInsure used out of date medical definitions in its trauma policies, specifically relating to heart attack and severe rheumatoid arthritis.

The regulator described this as "out of touch with community expectations" given that consumers cannot be expected to know whether a medical definition is already out of date when they purchase an insurance policy.

ASIC's deputy chairman Peter Kell, responsible for the report, said some customers had bad experiences with CommInsure.

"Individual customers have had highly distressing experiences from poor claims handling or claims denial," he said.

Mr Kell said there is considerable further work to be done by CommInsure, and others in the insurance industry, to rectify that situation and has again called for the claims handling process to be brought under the jurisdiction of the Corporations Act. Currently it is exempt.

ASIC is also continuing to investigate the way CommInsure advertised some of its insurance policies before March 2016.

At an industry level, ASIC said it plans to investigate the surveillance practices used by insurance companies on people making claims, as well as looking at direct insurance channels, such as policies sold online.

ASIC has demanded that CommInsure conduct an independent investigation of its claims handling processes by the middle of next year to provide reassurance that it is lifting its game.

On that point, Mr Kell said the whole industry needed to improve the way it operated.

As a result of the Four Corners and Fairfax investigation, CommInsure updated its heart attack definition and backdated it to 2014.

CommInsure said that decision has resulted in 17 people being paid a total of $2.5 million. The insurance arm responded to ASIC's investigation by taking that updated definition back to 2012.