ALA calls for reform against insurers unfairly denying claims

ALA/reform/insurance/claims/Insurers/Josh-Mennen/Royal-Commission/RC/

image
image image
expand image

Urgent reform is needed to prevent insurers unfairly denying claims based on unrelated pre-existing health conditions, and accessing medical records dating back more than five years prior to the policy inception, according to the Australian Lawyers Alliance.

ALA spokesperson, Josh Mennen, said the current regime was disproportionate and unfairly tilted in favour of the insurer.

“It permits the insurer to take a sledgehammer to the policy where a scalpel would be more appropriate,” said Mennen.

The spokesperson said claims were too often denied by insurers after they trawled through a claimant’s medical history and found an undisclosed (and resolved) condition in the history of the claimant, highlighting a reference to depression or anxiety as an example.

“It is too easy for insurers to deny claims in circumstances where the non-disclosure was an innocent un-related mistake and the insurer would have provided a policy to the consumer anyway on slightly different terms,” he added.

The ALA outlined its position in a submission responding to policy questions arising from the Banking Royal Commission and is calling for courts to have the discretion to disregard insurer avoidance for innocent non-disclosure in circumstances where it would be harsh or unfair to deny a claim.

The ALA also proposes insurer surveillance of consumers with mental health conditions should only be allowed with prior approval of an independent body.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

4 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months ago

Commonwealth Bank has formally dropped to zero advisers following LGT Crestone’s acquisition of its advice arm – some six years on from the Hayne royal commission. ...

3 weeks 5 days ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 1 day ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

2 weeks 4 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
3