Insurer’s staff ‘fought to deny cancer claim’

A woman with cervical cancer was ‘shocked’ when Australia’s largest life insurer, TAL, tried to cancel her policy.

A woman with cervical cancer was “shocked” when Australia’s largest life insurer, TAL, tried to cancel her policy by claiming she had an unrelated “history of ­depression” that was not disclosed to the company.

When staff at the insurer ­realised one of TAL’s directors was concerned about the heavy-handedness of the case — which was settled after the woman took the case to the Financial Ombudsman — the employees embarked on a mission of trying to find other ways not to pay her claim, the fin­ancial services royal commission heard.

It followed further revelations of how TAL treated another woman who claimed on a mental health policy, only to have the company hire a private investi­gator to track her “every move” in a bid to stop the payouts, and ­resulted in the company attempting for eight years to deny the woman’s legitimate claim.

Amid the various administration errors TAL inflicted on the woman, she became so unwell her psychiatrist warned she suffered a “progressive deterioration” in her health that left her unlikely to be able to go back to work.

“The level of suspiciousness, feelings of oppression, loss of trust and social withdrawal have all worsened considerably,” the doctor said, in a note read to the royal commission by senior counsel ­assisting Rowena Orr QC.

Despite admitting previously that TAL had bullied the customer by subjecting her to invasive surveillance and stifling bureaucracy, TAL general manager of claims Loraine van Eeden would not accept the company made its customer’s mental health condition worse.

The royal commission revealed TAL’s claims staff used to have KPIs focused on making a profit for the insurer, which is owned by Japan’s global giant Dai-ichi Life Group.

Shocking misconduct by the country’s biggest life insurers was revealed by the commission this week, including evidence that Freedom Insurance staff mocked a father of a man with Down syndrome and repeatedly refused to cancel the junk insurance.

Independent life insurer ClearView admitted to more than 300,000 breaches of criminal anti-hawking laws in forcing unwanted policies on poorer Australians, while CommInsure, the life insurance arm of Commonwealth Bank, knocked back a claim from a woman who had breast cancer, despite the pleadings of doctors and by relying on a two-decades- old medical definition that it refused to backdate.

CBA was also revealed to have misled the Financial ­Ombudsman.

Yesterday, TAL stoked the ire of Commissioner Kenneth Hayne after Ms van Eeden refused to answer whether she thought the company’s treatment of its customer was “heavy-handed”

“That’s not the way the system works. What’s your view?” Mr Hayne demanded.

At another point, Ms van Eeden agreed that TAL’s statement that a customer was required to complete an activities diary was misleading, but insisted this was not a lie.

“Do you accept the word ‘lie’?” Mr Hayne was forced to ask, to which Ms van Eeden said she couldn’t “actually comment on” before eventually conceding.

Meanwhile, the phone call to the woman with cervical cancer was played aloud. When a TAL manager phoned to warn that her policy would be cancelled, she said: “I certainly didn’t deliber­ately not disclose anything.”

The case went to the Financial Ombudsman service, where it was settled for a $25,000 payment even though the customer would have been entitled to $45,000.