TAL investigators gathered info under false pretences, RC told

13 September 2018

Multiple TAL case managers appear to have instructed private investigators to attend hospitals and police stations under false pretences to gather information that would enable the insurer to deny claims, the Royal Commission into Misconduct in the Banking and Financial Services Industry was told on Thursday.

Citing email correspondence between a TAL case manager and an investigator, senior counsel assisting the Commission, Rowena Orr QC, inferred that investigators were encouraged to conduct “pretexts,” which appeared to involve posing as relatives of claimants in order to gather information that could possibly result in the denial of their claims.

The correspondence read: “Please complete a pretext at the hospital (where the insured worked) and maybe discuss with the local police about her (the insured). There may be some issues there as well.”

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Senior Counsel Orr asked Loraine van Eeden, general manager, claims at TAL Group: “What did it mean to do a ‘pretext’ at the hospital?”

“Once again, I’ve got no idea,” van Eeden replied.

Orr continued: “The private investigator was being asked to go to the hospital and under some pretext seek information about the insured, wasn’t he? Perhaps posing as a family member or a friend … Would it be appropriate to do that, to instruct that to happen?”

“No,” van Eeden responded.

Orr continued: “What about to instruct the private investigator to go to the local police station and see if they had any information about the insured?”

“This is all inappropriate,” van Eeden said.

Orr said this behaviour was inappropriate and was the result of the decisions of multiple TAL case managers – not just one person, which van Eeden agreed was the case.

Referring to other correspondence, Orr also told van Eeden it was pretty clear what a case manager meant when they told an investigator that they “want results”.

“She wanted the investigator to find information that would provide a basis for TAL to cease paying the insured’s claim, a basis for TAL to avoid paying the $792,000 liability that it would have under this policy.”

Van Eeden acknowledged her previous statement furnished to the Commission that the approach taken by TAL to seek to avoid paying the claim was “absolutely contrary to the way a claim should be handled” and that the direction given in the email, the tone of the email and the instructions given to the private investigator was “totally unprofessional”.

Orr became clearly frustrated with van Eeden’s continued inability to provide responses to her line of questioning, specifically when asking her what TAL meant when it authorised “desktop surveillance”.

“Miss van Eeden, it’s somewhat difficult when the person that TAL presents to deal with these case studies is unable to explain so many aspects of them,” Orr said.

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The actions of CBA and TAL are nothing short of sociopathic!! These executives should be thrown into jail and these companies fined so much that no insurance company ever dares to do this in the future.

Its pretty stunning stuff, Private investigators, lying to FOS, no wonder australians don't believe in insurance. Of course, the onflow of all this will give insurers an excuse to increase premiums, but all that leads to is further cancellation of much needed insurance. Competitively we need some big international players to see an opportunity here and move in to this market.

like Hannover?

I understand your point. No mine was more wishful thinking that some quality/client focused international with a big balance sheet would see the long term profit potential and create some competition. One of the underlying problems has been the bond rates. Insurers could invest the premiums at 5-6% in normal markets, now that's 3%.

I listened to quite a bit of the RC yesterday and firstly I'd ask why they even had Loraine Van Eeden on the stand, she clearly has no idea about many aspects of underwriting or claims handling. I'd also say that in general I've only ever had very positive dealings with all life insurers when it comes to claims, including TAL. They have picked one negative case out of thousands, with most having had excellent claims experiences, that's the nature of the RC I suppose, find the issue that will create the biggest headline.

To the case itself, from what I heard, the claimant had taken 9 days off of work due to work related stress in the year leading up to her applying for her policy. She answered no to the standard mental health question which includes the word stress. From my experience, if she had told TAL about this in the initial application the absolute best case scenario would have been a mental health exclusion. The contributing factors to TAL choosing to avoid the policy altogether were the recency of the stress related time out of work and the fact that she didn't work the required number of hours to be classed as full-time and even quality for income protection cover under TAL's policy, they made a decision to offer her cover on the basis that she had only very recently cut back her hours. TAL's behaviour from that point on in trying to avoid the claim was terrible but I do feel that the lady involved is very lucky to have had this case ruled in her favour on the back of this information.

Loraine Van Eeden is on the stand because the directors and executive are gutless. But to another of your points - do you think all the claimants that had their claims declined for unrelated minor non-disclosures had an excellent claims experience? She was 'lucky' after 8 years of bullying to get a decision in her favour? Is that what you'd tell your Mum? The claimant should go to the high court seeking damages.

Hey PK, as I said in my original post, TAL's behaviour after the FOS decisions was disgusting and that decision was not 8 years later, from memory it was within 12 months of the original decision to void the policy. Having said that, insurers are businesses not charities. It doesn't matter that the non-disclosure was unrelated to the condition being claimed on, she should have disclosed the information in the application and if she had have then the policy would never have existed and neither would this issue. Unfortunately people lodging claims also acts as a trigger for the insurer to investigate the clients full medical profile and confirm their previous disclosures. This is the only way it can work unless they write for a doctors report at application time in every instance.

In your world it seems everyone should answer no to every question on the application in hope that if they do have to claim the reason for claiming is not related to any previous medical conditions, then the insurer can't do anything about it. What a load of rubbish.

In this case I don't really see how it is unrelated anyway, she had missed work due to stress prior to the application and then claimed at a later date for anxiety/stress reasons....unfortunately the mental health bucket is large and a lot of conditions interact with each other.

Don't mean to sound harsh but some people see insurance as something their entitled and that's just not the case, particularly with life insurance products. Just a quick reminder as well that in 2016/17 the life insurers as a whole lost $377m on income protection policies, which are the policies in question at the RC, so it's not as if they are not paying claims.

Think you must have selective hearing. The minor non-disclosure was considered a non issue 8 years later by TAL and after FOS intervention because she was not read the full question when doing the proposal over the phone with the underwriter. You need to check your facts.

Maybe I have missed something but do the big organisations have different rulebooks and compliance obligations than small business people. If any of this had occurred within a small or medium business we would have not only been pulled into the swamp, tarred feathered and have eggs thrown at us, business closed down, names dragged through the s&^% pit again, I would really like to understand why ASIC has a different set of rules for big groups and small groups?

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