Posted on 11 Mar 2016
A leading insurance lawyer has called for an inquiry into the broader life insurance industry, claiming unethical conduct is widespread, with many insurers rejecting the legitimate claims of sick and dying people.
Slater and Gordon Insurance Lawyer Andrew Weinmann’s calls follow an extensive media investigation into the Commonwealth Bank’s life insurance arm, CommInsure, which revealed the insurer used obsolete medical definitions and even pressured doctors to change their opinions when assessing claims.
Mr Weinmann said the practices were unethical and intolerable and that calls for a Senate inquiry into the issue should not be limited to CommInsure.
“Delay and deny tactics are being used to punish sick and dying Australians every day, but the problem is not unique to CommInsure.”
“Rejections based on flimsy evidence and poor reasoning are plaguing the entire industry, with some insurers taking years to even make a decision one way or the other." Mr Weinmann said.
“One of our clients has been waiting three years for AMP to reach a conclusion about his inflammatory disease, even though other insurers accepted his TPD claim long ago."
Mr Weinmann said many people were finding themselves in impossible situations.
“We’ve been fighting for many clients who are in limbo after their claims were rejected,” Mr Weinmann said.
“Insurance companies are increasingly rejecting claims because people’s injuries and illnesses don’t meet the exact medical definitions under the policy wording.
“The clincher is that many of these claimants are then unable to take out life insurance to protect themselves in the future, because insurance providers generally refuse coverage for people who’ve suffered illnesses or injuries in the past, even if their claims were refused.”
Case study: when is a heart attack not a heart attack?
- Canberra teacher David Kurthi had a heart attack in February 2009, 11 years after he took out a trauma policy with insurer Tower, now known as TAL Insurance.
- The insurer rejected his claim for $150,000 because he didn’t suffer the ‘right kind of heart attack’, as specified by the definition of a heart attack under his policy wording.
- Mr Kurthi, 59, said he was furious his claim was rejected despite three specialists confirming he had suffered a heart attack.
“They take our premiums and then they say a flat no when you make a claim,” Mr Kurthi said.
“My life hasn’t been the same since I had a heart attack and I’ve been told if I was to take out another policy I would have to pay more. It’s bloody typical of them.
“The worst part is they’re all doing it – they need to be stopped.”