ASIC’s TAL case will test insurers’ rights

The ability of life insurance companies to gain access to a client’s medical records will be a key issue closely monitored by Australia’s major life insurers as the Federal Court deals with the Australian Securities and Investments Commission’s (ASIC’s) case against TAL.

One of the core issues in the case brought against TAL is the insurance company’s conduct in gaining access to the client’s medical records, particularly the use of a claims pack which suggested the insurer had a right to obtain and access those medical records.

Life insurance claims expert and principal of Integrity Resolution Services, Col Fullagar agreed that the major life insurers would be paying close attention to the court’s decision with respect to accessing client medical records in circumstances where it was common practice.

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However, he said that just because an insurer asserted the right to access a client’s records did not mean it had the clear-cut legal or moral right to do so.

“If the insurer has a good reason to seek that access then it should seek permission to do so and explain why, otherwise you have to question whether it is simply a fishing expedition,” Fullagar said.

In the case being brought by ASIC against TAL, court documents filed by the regulator suggests that while the insurer asserted the right to access the client’s records, no such right actually existed.

Insurance companies have known that the TAL issue was likely to be tested in court because it was a case study at the Royal Commission into Misconduct in the Banking Superannuation and Financial Services Industry and was specifically referred to ASIC by the Royal Commission.

ASIC is alleging that TAL’s conduct represented breaches of both the Corporations Act and the Insurance Contracts Act.

Money Management understands that TAL has settled the claim with the client involved in the ASIC case and was yesterday being circumspect in its public statements on the issue.

The insurer acknowledged that it had received legal proceedings from ASIC in respect of a claim in 2014 that was examined by the Royal Commission and said it respected the role of ASIC in consider the matters.

“TAL is considering its position and does not intend to provide further comment at this time,” the formal statement said.




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