Bank’s information demands over insurance claim unreasonable

Insurance policies,
Kamala took out a disability insurance policy in 1999 that would pay 75 per cent of her annual income if she was unable to work in her usual occupation as a result of injury or illness. Two years later, Kamala had a mental breakdown and was diagnosed with several disabling mental illnesses. She claimed on her insurance and the bank accepted her claim on the basis she provided three-monthly medical certificates. In 2004, Kamala undertook an independent medical examination at the bank’s request. It concluded she was unlikely to make any long-term improvement. From 2006, the bank asked for information about her financial affairs (mainly relating to properties she owned), as well as monthly medical certificates. Kamala considered this unreasonable, but co-operated nonetheless. In 2018, the bank said she would have to undergo another independent medical examination and also supply more extensive information about her properties and the income they generated. This was the final straw for her. She complained to the bank about its requirements for information, and then to us when the bank was unable to resolve her complaint.
June 2020


Our investigation

We looked at whether the bank’s requests for information were reasonable. We had serious concerns about the extent of the requests because:

  • The bank gave inconsistent reasons about why it wanted an independent medical examination – none of which related to her eligibility under the policy.
  • Monthly medical certificates seemed excessive, given numerous medical professionals had said Kamala’s condition was unlikely to improve.
  • Income earned from her properties did not disqualify her under the terms of her policy.

The bank agreed to significantly reduce the amount of information it would seek. However, Kamala wanted the bank to buy out her claim because she no longer wished to deal with it. (She said the claim and the complaint were taking a toll on her mental health.) We encouraged the bank to consider this option, and it offered her a goodwill payment of $108,000 to bring her claim and the complaint to an end.


Kamala accepted the offer.

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