TAL found guilty in Federal Court

The case related to a consumer who made a claim under her income protection policy in 2014 after she was diagnosed with cancer. TAL avoided her policy on the basis that she failed to disclose an unrelated prior medical history.

“TAL failed to act towards the Second Insured with decency and fairness in reaching its decision without giving the Second Insured a proper opportunity to put material to TAL,” said Chief Justice James Allsop.

“I also consider, though it can be seen as part of the same breach, that TAL should have told the Second Insured of the investigation and their concerns and that the failure to do so in the circumstances was likewise failing to treat her with decency and fairness. TAL failed thereby to act towards the Second Insured with the utmost good faith.”

ASIC also alleged that TAL engaged in false or misleading conduct in handling the consumer’s claim by making representations in a claims pack that it had a right, to delay processing of the consumer’s claim, and to withhold benefits under the policy until she provided certain executed authorities. However, the court found that these allegations were not made out.

“ASIC expects those involved in handling insurance claims to act consistently with commercial standards of decency and fairness, ensuring claims are handled in a fair, transparent and timely manner,” said ASIC commissioner Sean Hughes.

TAL has acknowledged the judgement, noting that the court dismissed ASIC's allegations of false or misleading conduct in the handling of the claim while saying the issue was "not representative" of the experience it aims to provide to customers.

"At all times during the claims assessment process we endeavour to employ an empathetic and sensitive approach and communicate fully with our customers, and we have previously acknowledged that aspects of the handling of this claim fell below those standards," TAL said in a statement.