06 October 2016
by Adele Ferguson

This bank tribunal isn't a show trial, it's a farce

CBA chief executive Ian Narev batted away questions with ease.

Far from being a show trial, the eagerly anticipated parliamentary banking tribunal was called out as a "farce" by one of its participants.

Sadly, it was never going to be much else, given the limited amount of time made available to drill the big four bank bosses: an average of about 15 minutes for each politician.

The purpose of the tribunal was the Turnbull government's attempt to stave off the growing calls for a royal commission.

But day one lacked purpose. Questions directed at CBA boss Ian Narev were unfocused, broad and in some cases catered to the pet topics of the MPs.

Members including Labor's Matt Thistlethwaite and Pat Conroy and Liberal Julia Banks did their best to make use of the occasion, but at the end of the day, time wasn't on their side.

As Labor's Pat Conroy said, "I have two days worth of questions here," but no time to ask them.

It meant complex questions were impossible to raise and answer, allowing many specific questions to be glossed over, evaded, put on notice or given enough spin to render them meaningless.

Thin questioning
The questions leapt from credit card rates, mortgage trackers and bank bill swap rates to life insurance policy definitions, financial planning scandals, remuneration and then on to the future of financial advice and return on equity on different products. It was a dog's breakfast.

Michael Gill's rheumatoid arthritis insurance claim was rejected.

CBA boss Ian Narev kicked off the tribunal with a statement that included an apology to individual customers who have suffered "poor customer outcomes" or poor customer service.

But he made it clear that he didn't believe the more serious allegations about the systemic nature of the CommInsure scandal had merit.

He said the bank had conducted an internal investigation into allegations raised by former chief medical officer Dr Benjamin Koh and, while the investigation was not yet complete, all indications were that there was nothing to be seen.

No systemic issues, no evidence of medical files being tampered with or deleted or a culture steered towards delaying or denying claims of its life insurance customers. In other words, no need for a royal commission.

The brutal reality was the hearing provided Narev with a perfect forum to frame the various scandals the way he wanted.

There's little surprise that this was their conclusion given they set their own terms of reference for a handpicked panel of independent experts. Meanwhile, we are still waiting for the results of the regulator's official investigation into CommInsure.

Soft launch
Interestingly, the bank did a soft launch of its investigation's results thus far.

This reduced to a single-page colourful flyer, but still made some interesting statements such as: "There has been no evidence found of medical files being maliciously deleted or tampered with. We investigated allegations about medical files when they were first raised nearly two years ago and found no evidence to substantiate these allegations."

It said 5 million documents had been retrieved and electronically reviewed and the independent experts conducted 60 formal interviews. But what does that really mean?

The brutal reality was the hearing provided Narev with a perfect forum to frame the various scandals the way he wanted. While MPs tried to grill the bank on the matters at hand, the forum provided little opportunity to properly challenge his assertions.

But when a bank sells life insurance policies that include medical definitions that are years out of date, such as its definition of a heart attack or rheumatoid arthritis, the question needs to be asked, why is this so? Who sanctioned this? What was the motivation?

Claims denied
Matt Thistlethwaite raised the treatment of Comminsure victim Michael Gill, who suffers from severe rheumatoid arthritis and had his claim knocked back based on an outdated definition.

The trauma insurance policies require customers to be "deformed" by the condition, and meet other criteria including blood tests, before they can receive a payment.

However, modern treatments prevent many patients with severe rheumatoid arthritis becoming deformed, even as they continue to suffer from the pain and debilitation brought on by the condition.

Medical classifications relating to rheumatoid arthritis, an autoimmune disease that affects 1 per cent of the population, have not required a patient to be "deformed" by the condition since at least 1987.

Inquiry 'farce'
CBA executive David Cohen said Gill's case had also been assessed by the Financial Ombudsman Service (FOS) and FOS had upheld CBA's decision. What he didn't say was FOS didn't feel it was in its remit to overrule a policy definition even if it was out of date.

But Thistlethwaite told the committee that Gill had spoken to someone at FOS who had suggested he stop taking the medication so that his bones could become deformed and then he would qualify for the policy definition.

The bank has now updated its definition of heart attacks and rheumatoid arthritis and backdated them to 2014, but Gill isn't eligible because he was diagnosed in 2011.

The banks have been the subject of a number of inquiries over recent years, none of which have come to much. This one is unlikely to be much different.

Pat Conroy described the tribunal as a "farce". Going by the first day, it is hard to disagree.