In
The case came before the
The case of
The
Actions of the insurer that led to this case
TAL engaged in a process referred to as "retrospective underwriting". This is where information obtained in the course of assessing a legitimate claim, is utilised by insurance companies to look back in time to determine whether insurance would have been offered initially if the particular information had been disclosed or known to them.
TAL utilised consent authorities signed by the insured individual to obtain her medical history. This was not for the purposes of assessing her claim but rather, to undertake an investigation to determine the validity of the policy. They did not inform her they were doing that.
TAL then failed to provide the claimant with the opportunity to explain why she did not disclose certain portions of her medical history to them, which indicated she had suffered from depression.
They also failed to further investigate or make enquiries of medical professionals (treating doctors of the claimant) about the true nature of her mental health, to determine whether this would have been a relevant factor in confirming the actual risk of insuring her.
TAL lacked "decency and fairness"
TAL accused the customer of having acted without good faith, threatened to recover monies paid to her whilst their investigation was pursued and cancelled her policy without notifying her and providing her with an opportunity to address their concerns.
His Honour noted:
"policies of this kind providing income protection are very important to the economic and human wellbeing of people. The legislation is, after all, about human and commercial conduct, relationships and activity. How an insurer conducts itself in its claim handling may be said to be part of the benefits for which an insured pays."
ASIC Commissioner
"ASIC expects those involved in handling insurance claims to act consistently with commercial standards of decency and fairness, ensuring claims are handled in a fair, transparent and timely manner."
Consumers put trust in their insurers and that is an important part of the relationship which relies on the core and long-standing principle of the duty of utmost good faith. That doesn't just refer to acting dishonestly or engaging in false or misleading conduct but includes failing to meet community expectations of decency and fairness.
If you've had anincome protection or total and permanent disability (TPD) insurance policy cancelled or a claim declined, you should get legal advice about your options for having that decision reviewed.
You can contact us by phone or email to arrange your consultation; either face-to-face at one of our offices, by telephone or by videoconference consultation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Ms
Ground Floor,
4101
URL: www.hallpayne.com.au
© Mondaq Ltd, 2021 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source