Insurance companies dodge penalties for payout breaches while families left hanging

After a year waiting for a decision by their insurer, NSW man Josh Roberts and his family are at risk of losing their home.

A year-long wait for a decision by their insurer has put Josh Roberts and his family at risk of losing their home after he was robbed of his ability to work by an epileptic seizure.

Under an industry code insurers are usually required to decide whether to pay claims like Mr Roberts’ within six months – but Mr Roberts and his partner, Amber Wilson, say they’ve been waiting for more than a year.

Cases like that of the Roberts family from Casino in NSW have sparked calls by lawyers for stricter rules forcing insurers to make decisions about claims on time.

The insurer, Resolution Life, is a Bermuda-based company that bought up vast numbers of customers – including Mr Roberts – when it took over the life insurance business of Australian group AMP in 2020.

Josh Roberts and Amber Wilson were ahead in their mortgage repayments before the seizure. Picture: Daniel Keogh

After driving trucks on and off for 20 years, Mr Roberts suffered a violent epileptic seizure in August 2021 that he said “just came on and hit me”.

“We witnessed the seizure – he blacks out, he’s completely gone,” Ms Wilson said.

“We didn’t know it was a grand mal seizure – we thought he was dying, actually.”

He was diagnosed with epilepsy by a neurologist in September 2021.

“When she [the doctor] confirmed it, that was it, the commercial driving licence was gone,” he said.

Ms Wilson said the couple provided medical evidence when putting in a claim for a lump-sum payment for total and permanent disablement.

“There were months that we were waiting,” she said.

“It was really difficult for the lawyer’s office to get in touch with them, she had to really hassle them.”

She says the couple was ahead on the mortgage payments for the home in Casino, NSW, where they live with their three children, but they were now in danger of losing their house.

“I literally have a call with our lender later today to try to negotiate with them not to start collecting on our home,” she said.

Mr Roberts underwent medical testing and a neurologist confirmed he had epilepsy in September 2021. Picture: Supplied

Mr Roberts’ lawyers, Slater & Gordon, say his case is one of 20 the law firm has on foot where Resolution Life has taken more than six months to make a decision.

Resolution Life said taking on the new business caused customer delays but said it was working to fix its systems.

“We acknowledge that migrating systems and rolling out new processes has meant that we have not always been able to address customer requests or complaints in the timely manner that we aspire to,” a spokesman said.

Under the Life Insurance Code, companies can only exceed the six month limit if there are exceptional circumstances outside of their control.

Mr Roberts with the couple’s three children. Picture: Supplied

But senior Slater & Gordon lawyer Annemarie Gambero said the code was “something of a toothless tiger” and needed strengthening.

“There’s no adequate consequence for a breach,” she said.

She said that taking too long to decide claims was a common problem but “in our experience Resolution Life is probably the worst offender, if not one of the worst offenders”.

“We’re finding that it’s taking a year or more to make a decision where there are no exceptional circumstances.”

Under a new version of the Life Code that comes into force on July 1, insurers will be required to pay up to $100,000 to charity for a “significant breach”.

The family witnessed Mr Roberts’ seizure but, not knowing what was happening, thought he was dying at the time. Picture: Supplied

However, the industry has yet to decide whether to bolster the code’s enforceability by registering it with the corporate regulator.

Resolution Life’s spokesman said paying claims was always the company’s priority but sometimes complex total disability claims took a longer time because more information was required.

“We are assessing Mr Roberts’ TPD claim which remains on track and within the LICOP [Code] time frames,” the spokesman said.

“Should Mr Roberts be unsatisfied with the assessment process or outcome, there is an independent complaints avenue available to him.”

Originally published as Insurance companies dodge penalties for payout breaches while families left hanging