{"id":33926,"date":"2016-07-26T23:00:55","date_gmt":"2016-07-26T12:00:55","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=33926"},"modified":"2025-09-02T11:34:33","modified_gmt":"2025-09-02T01:34:33","slug":"critical-court-decision-removes-tpd-distinctions","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2016\/07\/26\/critical-court-decision-removes-tpd-distinctions\/","title":{"rendered":"Critical Court Decision Removes TPD Distinctions"},"content":{"rendered":"

Financial advisers will need to be vigilant when recommending TPD policies with an \u2018Any Occupation\u2019 definition after a recent court case removed the distinction between \u2018unable\u2019 and \u2018unlikely ever\u2019 to return to work after an injury.<\/p>\n

\"Jeffrey<\/a>
BT Life’s Jeffrey Scott<\/figcaption><\/figure>\n

This shift will mean that future TPD claims may be more onerous for blue collar workers who could retrain for another occupation, claims BT Life Senior Manager, Product Development, Jeffrey Scott<\/strong>.<\/p>\n

Speaking at a recent MDRT NSW Chapter meeting, Scott said the Shuetrim Case [2016] NSWCA 68 <\/a>\u2013 which was heard in the Court of Appeals of the NSW Supreme Court in April 2016, had effectively raised the standard for an \u2018unlikely ever\u2019 definition to the point it could be considered the same as an ‘unable’ definition.<\/p>\n

\u201cIn the past \u2018unable\u2019 was perceived as a more stringent definition than \u2018unlikely\u2019. Previous case law interpreted \u2018unable\u2019 to mean 95% certainty of never returning to work, compared with a 50% certainty with \u2018unlikely\u2019,\u201d Scott said.<\/p>\n

\u201cThe Shuetrim case states that \u2018unlikely\u2019 now means a very high probability that a person could not return to work in their chosen field or another field based on their education, training and experience.\u201d<\/p>\n

“…clients with \u2018Any Occupation\u2019 TPD policies, may discover the claims process with an \u2018unlikely to ever return to work\u2019 definition may become more onerous…”<\/h6>\n

Scott said while the decision was causing concern for actuaries within life companies\u00a0which had differently priced the risks on these two definitions, advisers should also be concerned about the impact on their clients.<\/p>\n

\u201cFinancial advisers and their clients with \u2018Any Occupation\u2019 TPD policies, may discover the claims process with an \u2018unlikely to ever return to work\u2019 definition may become more onerous. \u00a0The decision in the Shuetrim case implies it is not unreasonable to require people retrain for another job.\u00a0 This will likely have the greatest impact upon blue collar workers who could retrain to a different job with a similar level of remuneration,\u201d Scott said.<\/p>\n

\u201cIt is unlikely that a brain surgeon with seven years of university studies is going to be affected by this ruling, as it would be too difficult to retrain to a similar level of specialisation.\u00a0 Alternatively, someone who could be retrained in a few weeks or a couple of months may be disadvantaged by this decision.\u201d<\/p>\n

Scott stated that many life insurance companies already have terms and conditions requiring customers to undertake reasonable retraining programs under their TPD policies, and this is likely to increase following the Shuetrim Case.<\/p>\n

Scott suggested that advisers may want to consider split TPD policies that offered \u2018any occupation\u2019 as well as \u2018own occupation\u2019 to their clients.<\/p>\n

Editor\u2019s Note:<\/em><\/p>\n

While a significant outcome from this case has been the need for insurers to reassess the relative meaning of \u2018unable\u2019 and \u2018unlikely ever\u2019 clauses within a TPD definition, the main cause of the claim related more to Mr Shuetrim submitting that the insurer \u2018\u2026breached its duty by failing to refer to particular medical and psychiatric opinion as well as the vocational assessment report.\u2019 These breaches were held by the court to be \u2018\u2026so unreasonable as to vitiate the insurers\u2019 decisions\u2019 to deny the claim.<\/em><\/p>\n

Click here<\/a> to access the full judgement of TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim [2016] NSWCA 68 (7 April 2016)\u2026<\/em><\/p>\n

In this month’s RiskInfo eMagazine, Scott also addresses the issue of how much disclosure is appropriate for advisers and their clients, given recent changes to the Insurance Contracts Act. That article can be found here.<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Financial advisers will need to be vigilant when recommending TPD policies with an \u2018Any Occupation\u2019 definition after a recent court case removed the distinction between \u2018unable\u2019 and \u2018unlikely ever\u2019 to return to work after an injury.<\/p>\n","protected":false},"author":3,"featured_media":33968,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8294,4],"tags":[4247],"class_list":{"0":"post-33926","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-claims","8":"category-products","9":"tag-feature"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/33926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=33926"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/33926\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/33968"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=33926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=33926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=33926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}