ASIC has commenced proceedings in the Federal Court against TAL Life Limited for alleged breaches of the ASIC Act, the Corporations Act and the Insurance Contracts Act, in relation to a claim made under an income protection policy.
The regulator stated the investigation arose out of a referral made by the Financial Services Royal Commission.
“The consumer (whose identity was the subject of a non-publication order during the Financial Services Royal Commission) first made a claim under her income protection policy in January 2014 after she was diagnosed with a medical condition,” ASIC stated in a release, which also noted:
“After obtaining the consumer’s medical history, TAL sent a letter confirming that her policy would be avoided on the basis that she had failed to disclose some unrelated prior medical history. In that letter, TAL asserted that she had breached her duty of good faith under s13 of the Insurance Contracts Act.”
ASIC alleges that the insurer’s investigation of the consumer’s medical history was based on false statements made by TAL in a Claims Pack sent to her.
The regulator also alleges that in sending a letter to the consumer, in which it avoided the insured’s policy, TAL:
- Avoided the policy without first offering the insured an opportunity to address concerns
- Accused the consumer of breaching her duty of disclosure and her duty of utmost good faith under the Insurance Contracts Act
ASIC is seeking civil penalties in relation to the alleged breaches of s12DB of the ASIC Act and various declarations in relation to the ASIC Act, the Corporations Act and the Insurance Contracts Act.