New insurance code a welcome step towards ending mental health discrimination

The new General Insurance Code of Conduct, produced by the Insurance Council of Australia, will increase protections for people with a current or past mental health condition.

‘Nearly half the population will develop a mental illness at some point in their lives, yet it is surprisingly common for insurers to unfairly discriminate against people who experience these conditions,’ said PIAC Senior Solicitor Ellen Tilbury.

‘The modernised code has the potential to improve the experience of many people in dealing with insurers.’

New provisions in the code include:

  • Recognising the unique needs of people who disclose a mental health condition to an insurer;
  • Complying with the Disability Discrimination Act in designing, selling and applying the terms of their products
  • Only asking relevant questions when deciding whether to provide cover; and
  • If cover is denied, telling you about your right to ask for the information relied on in making the decision.

The code will require insurers to stop surveillance of an individual in the course of considering or paying a claim if they become aware a person has a pre-existing mental health condition.

‘It is great to see the that the new Code of Conduct includes a number of provisions that specifically deal with the systemic discrimination which is experienced by people with mental illness who seek to access general insurance products. The previous code, adopted in 2014, made no specific reference to mental health.’

Most encouragingly, the new provisions will results in a move away from blanket mental health exclusions, and bring an end to the practice of automatically declining applications for insurance where applicants disclose a mental health condition.

The code is accompanied by a specific guide on mental health document to assist insurers to develop internal processes, procedures and policies in relation to mental health.

‘This guide is a substantial improvement on the previous regime, and we congratulate the Insurance Council on taking these important steps towards making insurance fairer for people who have or will experience a mental health condition,’ said Ms Tilbury.

Ms Tilbury also said ‘There is still a long way for the industry to go as a whole. The General Insurance Code of Conduct applies to general insurance products only. However, unlawful discrimination against people with current or previous mental health conditions is most prevalent in the life insurance industry which has its own code of conduct. The current Life Insurance Code of Practice administered by the Financial Services Council does not sufficiently deal with discrimination by insurers in relation to mental health’.

‘Overly broad mental health exclusion clauses are routinely applied to life insurance products where a person discloses any kind of mental health history, even, for example, attending a counsellor, or a periodic and temporary experience of depression and anxiety. PIAC wants to see an end to these discriminatory practices’.

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

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