Time for reform mental illness and life insurance

On 22 April 2016, PIAC made a submission to the Senate Economics Reference Committee’s inquiry into the need for reform and improved oversight of the life insurance industry. 

Since 2012, PIAC has been providing legal advice and representation to people who have experienced discrimination or been treated unfairly by insurance providers on the basis of mental health. It appears that the decisions of some insurers are not always based on relevant actuarial or statistical data as required by anti-discrimination law.

Insurers appear to be refusing insurance or offering insurance on non-standard terms based on out-dated understandings of mental health, which lump unrelated mental health conditions in one category and fail to recognise that mental illness can impact on individuals differently depending on their circumstances and the severity of their condition. 

PIAC’s submission makes 12 substantive recommendations for reform, including proposals for legislative amendment and the development of a life insurance industry code of conduct. You can read PIAC’s submissions here. 

Given that one in five Australians will be affected by mental illness in any year and 45% of Australians will experience a mental illness at some time in their life, it is clearly a matter of broad public interest to ensure that the insurance market is operating in a manner that is founded on robust evidence and contemporary understandings of mental illness. 

PIAC will continue to work with Mental Health Australia and beyondblue to identify legal challenges to redress individual injustices and to bring about broader industry based improvements to the way insurers deal with mental health. 

If you feel that an insurance provider has treated you unfairly or possibly unlawfully because of a mental health reason, you are welcome to contact Laura Lombardo or Michelle Cohen at PIAC who may be able to assist you with legal advice. 

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