Lawyers call for inquiry into mental health insurance discrimination

15th Jun 2018

The ALA is urging the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to investigate discrimination by insurers on the basis of mental health.

“We urge the Commission to address this important issue,” said Josh Mennen, spokesperson for the Australian Lawyers Alliance (ALA). “We believe there are systematic problems in the way people with mental health conditions are treated by the insurance industry.

“The insurance industry needs to be asked to explain its practices and have these decisions externally reviewed by the Royal Commission.”

In a letter to the Commissioner, the ALA has endorsed the submission made by the Public Interest Advocacy Centre and urged the Commissioner to conduct this inquiry.

“There is evidence that there are discriminatory practices in place in the way insurers design, price and offer policies, and assess claims for people with past or current mental health conditions, particularly their use of blanket mental health exclusion clauses where they lack supporting data,” said Mr Mennen.

“A consumer should not have to take legal action to get an insurer to justify its decisions with appropriate data in relation to mental health.

The Royal Commission provides an opportunity to compel insurers to release the actuarial data they are using to assess risk and make decisions on insurance applications and claims from people who disclose a mental health condition or otherwise explain the absence of such data.

“Too many people have been denied insurance after disclosing a mental health condition, even minor and one-off incidents,” said Mr Mennen.

“We have also seen examples of clients who have not disclosed a mental health issue and have had their policies cancelled, even when their condition is minor and could just have resulted in a small variation to the policy.

“With almost half of all Australians likely to experience a mental health issue at some stage in their life, such discriminatory practices will impact many people.”

“The insurance industry should be more transparent about these practices and the Royal Commission offers a chance to properly scrutinise these issues.”

The ALA is a national association of lawyers, academics, and other professionals dedicated to protecting and promoting justice, freedom and the rights of the individual.

Tags: Access to justice Insurance