News that an admin error saw an insurer refund a client thousands of dollars in premiums and compensation attracted plenty of reader interest this week…
Entering the wrong date of birth on an application for life insurance has seen an insurer pay a client almost $90,000 in overcharged premiums and interest.
The policyholder took out cover in 2016 with the help of an adviser who placed the business with Clearview Life Assurance.
When the policyholder realised the mistake he contacted the insurer. It refunded $89,815.50 in overcharged premiums and interest early last year.
However, the policyholder complained to the Australian Financial Complaints Authority (AFCA) saying Clearview Life Assurance should pay him compensation of $500,000 for alleged lost investment income and extra expenses.
He claimed the money incorrectly paid to the insurer could have been invested.
…the complainant has suffered losses as a result of paying higher premiums…
AFCA declined the claim stating he needed to provide a detailed and credible explanation and calculations for the amount claimed – which he did not do.
“It is conceivable that the complainant has suffered losses as a result of paying higher premiums than he should have over many [seven] years,” states AFCA.
“However, the insurer should pay some of the rest of his claims if he provides further information.”
AFCA agreed the insurer should compensate the claimant to amend historical tax returns, and stated all parties shared responsibility for the error:
- The wrong date of birth was first provided by the complainant’s adviser in the application process
- The correct date of birth was provided to the insurer during and after the application process
- The insurer had opportunities to identify the inconsistency and the error at an earlier date
- The incorrect date of birth was also recorded on documents sent to the complainant and his adviser by the insurer. That gave the complainant and the adviser opportunities to identify and correct the error at an earlier date
“I am satisfied that both parties bear some responsibility for the error being made in the first place and for it not being corrected for some years,” states the AFCA adjudicator.
Click here to read the full decision.
