Stop insurance discrimination against people with mental health conditions

Joint media release with beyoneblue and Mental Health Australia.

How many more concessions and delays does the insurance industry want when it comes to reforming their unfair and outdated practices and attitudes to mental health?

For years, beyondblue, Mental Health Australia (MHA) and the Public Interest Advocacy Centre (PIAC) have urged insurers to stop systemic discrimination against people with mental health conditions.

The Financial Services Council (FSC) – the insurers’ peak body – has released the Life Insurance Code of Conduct, the first of its kind for the life insurance industry. But disappointingly, it makes no mention of how life insurers should engage with the large proportion of the population with mental health conditions.

While the code sets minimum standard medical definitions for heart attack, stroke and cancer, it ignores the elephant in the room by failing to mention mental health reform. This code has failed to establish appropriate procedures for life insurers to adhere to when considering life insurance applications that reveal a mental health condition.

“This was a chance to address the problem of systemic discrimination by insurers against people with mental health conditions. The code has ducked the issue and makes no mention of mental health,” said the Public Interest Advocacy Centre’s (PIAC) CEO Jonathan Hunyor.

The FSC has said it will eventually revisit the Code of Conduct to deal with mental health concerns, but gives no guarantees and sets not timelines.

“This is not good enough,” said beyondblue CEO Georgie Harman. “For 15 years beyondblue has worked to educate the FSC on the reality of people living with mental health conditions. It has not got the message and is failing to lead its industry to meet 21st century expectations.

“Three million Australians have, or are currently experiencing, a mental health condition. The delay is unacceptable.”

The FSC now states it will work with groups like beyondblue, MHA and PIAC to determine how to better serve consumers with mental health issues.

“People who live with mental health conditions are tired of words; they want action,” said Ms Harman.

Mental Health Australia CEO Frank Quinlan said this is just another example of the insurance industry not taking mental health seriously.

“While the industry recognises a range of problems it needs to deal with, mental health is still in the too hard basket and it’s not good enough,” said Mr Quinlan. “We have waited years to see concrete action and we’re still waiting.”

Mr Hunyor called on the FSC to address this issue without further delay: “Ending discrimination against people with mental health conditions should not be treated as an afterthought.”

Key points:

  • Insurance discrimination against people with a mental health condition is a common problem.
  • It is estimated half of us will experience depression or anxiety in our lifetimes, with the vast majority making a full recovery. Yet insurers impose a life sentence on those with mental health conditions.
  • Discrimination takes various forms including outright rejection of cover on dubious or undocumented grounds, unreasonable terms and conditions including inflated premiums, and unfair denial of claims.
  • An MHA and beyondblue Survey of Consumer Experiences (2011) found that across all insurance types, 24 per cent of people received an insurance product with exclusions relating specifically to mental health conditions. Twenty five per cent of those obtaining life insurance received an exclusion relating to mental health conditions while 34 per cent received an exclusion on their income protection insurance.
  • We call on the insurance industry to change its practices and on policy‐makers to consider legislative changes that better defend the rights of the individual.
  • We want to see change so that insurers do not unfairly discriminate on mental health grounds and apply sound, effective and proportionate judgement to individual insurance policy applications and claims, based on robust, contemporary statistical and actuarial data.

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