Australia’s insurance world has been scrambling in response to damning revelation about Commonwealth Bank’s insurance arm.

An expose by the ABC this week has sent the sector into damage control, after it was revealed that CommInsure had repeatedly changed, denied and deleted medical records of people it was meant to protect.

The Government has now expanded the Senate Committee's existing inquiry into the financial planning industry, after Assistant Treasurer Kelly O'Dwyer described the allegations as “shocking”.

In addition, Ms O’Dwyer said Australian Securities and Investments Commission (ASIC) is looking into the cases as a matter of urgency.

The bank's insurance arm is accused of denying legitimate heart attack claims using an outdated definition in the fine print of policy documents.

Cardiologists interviewed by the ABC suggest CommInsure's policy definition is years out of date.

Despite CBA’s claims that “assertions made in the media that CommInsure was not responsive to internal concerns raised are incorrect”, the bank later announced it was changing its ways.

“CommInsure has taken a range of actions, including benchmarking of product features, targeted review of customer claims, governance changes to enhance structural independence and additional training for claims staff, including customer empathy and professional protocols,” a statement said.

CommInsure says it is moving forward its planned upgrade of “heart attack” and “severe rheumatoid arthritis” definitions.

The insurer will also impose a layer of independence in its claim process.

“Where CommInsure's claims committee recommends a complex claim be declined, it will be referred to an Independent Review Panel. The Panel will consist of the managing director of CommInsure and at least two independent industry experts, who will be announced within the next month. A sub-committee of the CommInsure Board will monitor the outcomes of the Panel,” the statement said.

Association of Financial Advisers (AFA) chief executive, Brad Fox, says the scandal is a symbol of the need for advisers to be more active in supporting clients through the process of making a life insurance claim.

“There is no one else in the claims experience that offers the service that advisers do,” Mr Fox told reporters.

“If you are in the unfortunate position of having to make a claim, you want an expert on your side, helping you navigate through financial and emotional stress.”

“They help clients to become properly insured and clients will also find that if they do have to file a claim, they are more likely to have the right policy, with the right advocate, working for them.

“And this is a great outcome deserved by all Australians.”