TAL added to mentally ill insured’s stress: RC
In a year in which TAL has tried to position itself as an industry leader on mental health, the Royal Commission has heard that its treatment of an insured not only denied the mentally ill customer assistance at various points of her claim, but also actively contributed to her stress.
Senior Counsel assisting the Commission, Rowena Orr QC, outlined extensive evidence showing that TAL’s treatment of the insured was littered with mistakes and “deeply problematic behaviour” that included “misleading the insured, misleading FOS [Financial Ombudsman Service], and authorising conduct that involved very troubling breaches of the insured’s privacy”.
Over many months, TAL failed to provide the insured with monthly statements or to pay benefits in a timely manner, both of which the customer had to follow up with the firm herself. On at least four occasions, the insured received letters from TAL suggesting that she was required to pay premiums despite being on claim. One such letter was as recently as May this year. The insured was also told that her policy had lapsed because she hadn’t paid premiums.
When asked to explain these issues by Orr, TAL general manager, claims, Linda Van Eeden, put them down to “administrative errors”.
The insured was also told that in September of this year her policy would be reviewed, which Van Eeden said was “standard practice”.
Orr characterised TAL’s behaviour as a “deeply troubling response to a legitimate mental health claim”, suggesting that the “approach taken by TAL was to avoid paying out the claim rather than to assist the insured”.
Appearing on behalf of the insurer, Van Eeden, accepted that in this instance, that was true.
When questioned by Orr on whether TAL’s behaviour had in fact exacerbated the insured’s mental health condition, Van Eeden declined to comment, building on a trend throughout the hearing of the general manager being unable to provide answers to the Commission.
“Do you accept that TAL’s treatment of the insured over the past eight years caused her [the insured’s] considerable distress and has significantly exacerbated her mental health condition?” Orr asked.
“I can agree to us causing her stress but cannot comment on the exacerbation of her condition as there could be many other factors as well,” Van Eeden said.
Orr then asked whether the matters discussed before the Commission were likely to have exacerbated the insured’s mental health condition, to which Van Eeden again acknowledged “a lot of stress” had been caused by TAL but that she could not comment.
When Orr queried, in light of the above evidence, if Van Eeden was aware that holders of Australian Financial Services Licences (as TAL is) had an obligation to do all things necessary to ensure that the services covered by the licence are provided efficiently, honestly and fairly, Van Eeden said she was.
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
