ASIC takes TAL to court on RC charges

The Australian Securities and Investments Commission (ASIC) has initiated action against major life insurer, TAL Life for alleged breaches of the Corporations Act and Insurance Contracts Act entailing its handling of income protection claims stemming from the Royal Commission.

ASIC said it would be alleging that a TAL investigation of a consumer’s medical history was based on false statements made by TAL in a Claims Pack sent to the consumer and would also be alleging that in sending a letter to the consumer, in which TAL avoided the insured’s policy, TAL avoided the policy without first offering the insured an opportunity address concerns and accused the consumer of breaching her duty of disclosure and her duty of utmost faith under the Insurance Contracts Act.

ASIC said it was seeking civil penalties in relation to the alleged breaches with the maximum penalty at the time of conduct being 10,000 penalty units of $1.7 million.

ASIC said the consumer first made a claim under her income protection policy in January 2014 after she was diagnosed with a medical condition but that after obtaining the consumer’s medical history, TAL sent a letter confirming that her policy would be avoided on the basis that she had failed to disclose some unrelated prior medical history.