Mental health discrimination: calls for life insurers be held to account

In a landmark report released on 27 March 2018, the Parliamentary Joint Committee on Corporations and Financial Services has recommended a range of initiatives to improve the way the life insurance industry deals with issues relating to mental health.

Key recommendations include the establishment of a binding and enforceable code of practice in relation to mental health life insurance claims, and greater transparency when claims are rejected and when non-standard terms are proposed for a policy.

Through the Mental Health and Insurance Project, PIAC provides legal assistance to people who have been unfairly treated by insurers because of a past or present mental health condition, and advocates for systemic change. For years, PIAC has been calling for reform.

‘We are encouraged to see that some of our recommendations to the committee have been adopted and we look forward to seeing them implemented,’ said PIAC CEO, Jonathon Hunyor.

‘In particular, we welcome the recommendation that the Financial Services Council establish a mandatory and enforceable code of practice for its members, specifically in relation to mental health life insurance claims.

‘It’s time the insurance industry was held accountable for the way it responds to issues around mental health, especially as there is evidence that some people are not seeking treatment for mental ill health for fear of how a diagnosis may be used by insurers.

‘We also welcome calls for insurers to provide people with plain English written reasons when their application for insurance has been rejected or an insurance claim has been denied.

‘Around half the population will experience a mental health condition at some point in their lives.

‘People should not be discouraged from seeking early treatment for common conditions such as depression and anxiety for fear it could result in the cancellation of an insurance policy, or denial of a claim when they need it most,’ said Jonathon Hunyor.

Read the committee’s report or PIAC’s submission.

Image by Pictures of Money is licensed under CC by 2.0.

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