The corporate regulator is being urged to launch an “urgent” investigation into mental health discrimination by insurers following the release of a new report.
The Public Interest Advocacy Centre’s (PIAC) mental health and insurance project highlighted that people with mental health history are being denied insurance or “offered cover subject to broad, unreasonable exclusions”.
PIAC’s report noted ongoing issues with life insurance products such as income protection insurance and has called for measures to be implemented to increase industry accountability including making changes to the life insurance code of practice.
PIAC senior solicitor Ellen Tilbury said the issue is now a matter of public interest.
“We don’t believe that change will occur unless underwriting practices relating to mental health come under the scrutiny of ASIC – the appropriately empowered regulator,” Ms Tilbury said.
“If insurers don’t lift their game, there is a real chance people will be discouraged from seeking essential treatment for common conditions like anxiety and depression, for fear of being locked out of insurance.”
In statements given exclusively to ifa, local life insurers TAL and MetLife supported PIAC’s call, saying that supporting customers with mental health conditions is one of the most important jobs for the industry.
“The life insurance industry continues to develop and evolve our practices in respect of providing life insurance products sustainably for all sections of the community,” TAL's statement read.
“TAL welcomes the PIAC report as a further opportunity to engage with stakeholders to challenge and continue to develop our practices. TAL will review the report in more detail and we remain committed to playing our part in working with the industry, our partners and groups such as PIAC on continuing to enhance our support and life insurance opportunities for those customers with mental health conditions.”
The report follows a 2019 analysis conducted by KPMG that found that claim payments for mental health conditions in the life insurance industry totalled $1.24 billion to over 9,500 Australians.
ASIC told ifa that is currently considering the report and the issues it raises.
The accounting and advice network has added another firm to its advice community. ...
The laws regulating corporations and financial services are uniquely and unnecessarily complex, the ALRC has argued in its latest report. ...
The financial services ombudsman has announced the appointment of a new head of its code compliance and monitoring team. ...