ASIC’s investigation into TAL Life Limited arose out of a referral made by the financial services royal commission.
The consumer (whose identity was the subject of a non-publication order during the financial services royal commission) first made a claim under her income protection policy in January 2014 after she was diagnosed with a medical condition. 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. In that letter, TAL asserted that she had breached her duty of good faith under s13 of the Insurance Contracts Act.
ASIC alleges that TAL’s investigation of the consumer’s medical history was based on false statements made by TAL in a claims pack sent to her.
ASIC also alleges that in sending a letter to the consumer, in which it avoided the insured’s policy, TAL avoided the policy without first offering the insured an opportunity to address concerns, and accused the consumer of breaching her duty of disclosure and her duty of utmost good faith under the Insurance Contracts Act.
ASIC is seeking civil penalties in relation to the alleged breaches of s12DB of the ASIC Act and declarations in relation to s12DA of the ASIC Act, s1041H of the Corporations Act and s13 of the Insurance Contracts Act.
The maximum penalty for a breach of s12DB (false or misleading representations) at the time of the conduct is 10,000 penalty units or $1.7 million. Section 13 of the Insurance Contracts Act did not have a penalty at the time of the conduct. If the conduct were to occur under the new penalty regime, effective from March 2019, the maximum penalty would be $1.05 million.
I’m reading a lot in the comments below about ‘genuine’ claims as opposed to ‘non-genuine’ claims.
The fact of the matter is Insurers do pay billions in claims, but they also need to be kept on their toes. There are many instances where if they find wiggle room to not pay a claim, they will go for it. It’s not systemic, but it does happen.
I have been involved in several claims where in the first instance the Insurer – when dealing with the claimant only – they would put barriers up or make it all murky and grey. The claimant would be confused, questioning if their claim was genuine. When the Insurer then realised the claimant had an informed advocate, who could hold them to the letter of the policy contract (incl. policy series etc), or a request to escalate things, etc – the tune would quickly change.
So simplifying this to genuine v non-genuine claims on the basis of the little information in the media is much too simplistic (and much too convenient).
Have we read the ASIC media release – very light on details. Have we considered the wider implications of the actions they propose ?
ASIC clearly have an agenda but is this agenda right for our clients and our industry? They want to move the industry to providing sustainable products but then appear to want to allow customers, who have not been upfront with facts, to be able to claim without consideration of these facts. Does not seem sustainable to me, premiums will likely increase out of reach of those ordinary people we are trying to protect.
What about our honest customers who had to pay higher premiums because they were honest and upfront about their medical history? We seem to have forgotten about these genuine people…
TAL confirmed by phone my client would get a partial trauma benefit about $30k for a melanoma removed from her breast -after I had sent them the histology report- which news I passed on to the client- Imagine my sense of betrayal and clients angst when letter came saying no claim would be paid and if she wanted to object to this she could go to the ombudsman- when I spoke to claims manager was told they had mis read the report- of course no mention of this was mentioned in letter! Is this a case for ASIC?
I’ve also had a good claims experience with TAL. You can’t be sure exactly what happened, here’s hoping this is a process issue and not a substantive concern.
This matter has been raised in other media too.
The claim was made for cervical cancer. The non-disclosure related to a brief psych counselling following relationship breakdown.
If the latter was indeed brief and did not affect work capacity, then we’re looking at a mental health exclusion at best.
Likely a poor decision by TAL, and doesn’t help that IP is under pressure across the industry.
How am I not suprised! I had them try to stitch up a client for $30k in an IP claim until I stepped in and took them to FICS a few years ago!
Further to my clearly opposing views to everyone else below, I’ve also had TAL Life tell one of my clients to STAY ON CLAIM when he wanted to come off 3 years earlier than his Age 70 BP expiry because my client said “he was always going to retire at age 67”. That extra 3 years is going to cost TAL over $408,000. Sounds like a damn good insurer to me folks!
Since when is overinsurance a good thing? And as for TAL, they’re meeting a contractual obligation. Nothing generous there.
How many of the banks have they taken to court over the fee for no service fiasco? How many of the executives from the banks have they banned?
TAL has clearly breached it’s duty of utmost good faith here. The changes to the insurance contracts act a few years ago must be reversed so that such conduct for unrelated non-disclosure is specifically prohibited. Claims handling must be changed to be a financial service under the corps cart as currently proposed so that this would also be a clear breach of fair, efficient and honest.
So you think its okay for people who would never qualify for a policy because of their medical history to lie and be able claim? Its okay for then to take advantage of insurers and ultimately take from the people who really need it?? Related or unrelated, you have lied. A contemporaneous condition doesnt erase past conditions. Dont cover lies with sympathies.
Sledgehammer meet walnut. All black and white, no greys, hmm?
So you think its okay for people who would never qualify for a policy because of their medical history to lie and be able to claim? Is it okay to cost the legitamite policy holders their monies? Related or not, a lie is a lie and it is not okay. A recent injury or illness does not erase the past nor does it provide it an excuse to take advantage of insurers. Dont use sympthay to cover up a lie. It is wrong.
No, no, no! I’ve had nothing but great experiences with TAL with EVERY claim I’ve ever lodged with them for my clients – and I’ve had a lot so I’m going into bat for TAL Life here. If the client failed in her DOD, then so be it. I had a client who deliberately held back information on an IP Policy I re-wrote with TAL and his claim was rightfully declined and also cancelled. No regrets here believe me. ASIC is absolutely obsessed with destroying this industry and it seems now, from every angle. I can’t wait ’til I leave this industry and have them out of my life forever. I despise everything they stand for and the people running it.
The issue is that TAL should have given her the opportunity to respond to their alleged non-disclosure, and THEN cancelled her policy. The issue is that they didn’t follow the required protocol and has nothing to do with declining claims. TAL has been very good with the legitimate claims we have lodged as well!
Couldn’t agree more… I’m actually tired of defending the changes and systems we have. I appreciate the people who have the patience and energy to stick this out but I don’t know why you would anymore.
Was there a adviser involved?
What does that have to do with anything? Another old risky who doesn’t actually read the whole thing…
“ASIC alleges that TAL’s investigation of the consumer’s medical history was based on false statements made by TAL in a Claims Pack sent to her.”
Nothing to do with the personal statement being incorrect.
No doubt TAL will negociate a settlement and be soundly spanked with a wet lettuce
Back in the day the insurance companies paid claims and were proud of it. The industry has regressed.
What a marvelous consumer experience right there…
Awesome. Get stuck in ASIC.