Calls for ASIC to investigate mental health discrimination from insurers

• Calls for Securities and Investments Commission (ASIC) to conduct an investigation into how life insurers handle persons with prior or current mental health disorders
• This is a crucial recommendation of Mental Health Discrimination in Insurance, the result of Public Interest Advocacy Centres (PIAC) research
• PIAC’s Ellen Tilbury says people with a mental health history can be denied insurance or offered cover subject to exclusions
• Ms Tilbury said that change will not occur unless underwriting practices relating to mental health come under the scrutiny of ASIC – the appropriately empowered regulator,
• According to the Financial Services Council, it has reviewed the PIAC report’s recommendations and endorses the majority of them

In response to alleged ongoing systemic discrimination by life insurers, the Australian Securities and Investments Commission (ASIC) should conduct an investigation into how life insurers handle persons with prior or current mental health disorders.

This is a crucial recommendation of Mental Health Discrimination in Insurance, the result of the Public Interest Advocacy Centres (PIAC) Mental Health and Insurance Project’s ten-year effort.

“Despite several major inquiries recommending reform, we continue to see people with a mental health history denied insurance or offered cover subject to broad, unreasonable exclusions, in the absence of clear evidence to support these practices,” Ellen Tilbury, Senior Solicitor at the Public Interest Advocacy Centre.

“This includes where a person has seen a counsellor once or twice, because they felt anxious or depressed following a relationship breakdown and have received no diagnosis of a mental health condition.”

PIAC, in collaboration with Beyond Blue, Mental Health Australia, and SANE Australia, has been addressing issues in the way insurers design, price, and provide plans, as well as how they analyse claims, to the detriment of persons with prior or present mental health concerns.

The research also recommends a number of other initiatives to improve industry accountability, such as enhanced transparency regarding the actuarial and statistical data used by insurers to make decisions, modifications to the Life Insurance Code of Practice, and improved dispute resolution systems.

“It is a matter of public interest that insurance providers act fairly and without discrimination, basing their decisions on robust evidence and contemporary understandings of mental health,” Ms Tilbury said.

“We don’t believe that change will occur unless underwriting practices relating to mental health come under the scrutiny of ASIC – the appropriately empowered regulator.”

“If insurers don’t lift their game, there is a real chance people will be discouraged from seeking essential treatment for common conditions like anxiety and depression, for fear of being locked out of insurance.”

According to the Financial Services Council, it has reviewed the PIAC report’s recommendations and endorses the majority of them.

“Those we support will be included in the Life Insurance Code of Practice 2.0,” Policy Director Life Insurance Nick Kirwan told Insurance News.

“However, we believe codes should not be about re-stating the law, but instead cover those areas where industry goes beyond the law. Indeed, ASIC’s regulatory guide says that codes should do more than merely restate the law.”

Lifeline: (13 11 14 and lifeline.org.au)