AFCA Upholds Fair Evaluation in Insurance Claim Dispute
AFCA Upholds Fair Evaluation in Insurance Claim Dispute
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The Australian Financial Complaints Authority (AFCA) has directed MetLife to re-evaluate a policyholder’s income protection claim, focusing on justified interpretations of mental health exclusions.
In a case brought to attention, the claimant, who secured his coverage via superannuation, applied for a $9300 monthly policy intended for a two-year coverage span back in March 2020.
The claimant's struggle began in August 2019 when his general practitioner declared him medically unfit for work due to "significant psychological distress," primarily catalyzed by workplace bullying.
As a recourse, the individual took personal leave in August followed by paternity leave in October of the same year. Although he resumed work in October 2020, he had to suspend his professional engagements again by December.
In September 2021, the claimant submitted a request for income protection benefits, citing an adjustment disorder diagnosed with mixed anxiety and depression as the reason inhibiting his capacity to work.
However, MetLife rejected the claim in July 2022, accusing the claimant of inaccurately representing his medical history. The insurance provider argued that the applicant falsely stated he hadn’t been “diagnosed with or sought medical advice or treatment” for psychological issues at the time of application.
MetLife asserted that the applicant already exhibited psychological distress, hindering his work capability long-term, and had they known, the policy would not have been issued. They determined his stress related symptoms equated “to a psychological condition.”
The claimant countered, maintaining he neither identified with a history of psychological ailments during his application process, nor would a typical person in his context.
AFCA elaborated, saying although the complainant experienced "significant stress in 2019," ordinary perception does not always align stress with a psychological or clinical mental health condition. The inquiry focused on awareness of any conditions at the time, not diagnosis existence.
AFCA highlighted that the treating GP did not insist on mental health assessments commonly expected when symptoms emerge, and the sole "treatment" employed was voluntarily steering clear of the work environment, a decision lacking a formal diagnosis.
They elucidated that “Even if the answers given were not actually true (because with the benefit of hindsight the complainant was in fact suffering from a psychological or mental health condition), the panel accepted a reasonable person in the circumstances would also have reached the same belief as the complainant did.”
Following the conclusion, AFCA mandates MetLife to process and revisit the claimant’s submission and communicate the outcome to Hostplus, the coverage trustee, within a 60-day frame. The original content was reported by the Australian Financial Review.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
A recent Australian Financial Complaints Authority decision involving a vandalised Hino truck is a useful reminder that disclosure disputes in commercial motor insurance turn on evidence, not assumptions. Reported by insuranceNEWS.com.au on 15 October 2026, the matter ended with Suncorp being ordered to reinstate the policy and reassess the claim after AFCA found the insurer had not proved that undisclosed driving history would have justified refusing the risk. - read more
Australia's construction sector remains under pressure, with recent insolvency figures continuing to show building and construction as one of the most exposed parts of the economy. Higher material costs, tight margins, labour shortages, delayed payments and fixed-price contract stress have all contributed to a tougher operating environment for builders, subcontractors and project owners. - read more
Recent transport industry sales updates point to a more selective new-truck market, with operators weighing replacement timing against finance costs, emissions planning, availability and contract confidence. For truck businesses, that matters well beyond the showroom. A change in buying momentum can flow through to vehicle values, repair economics, insurer appetite and the way fleets should set insurance sums before renewal. - read more
Fresh small business cyber warnings are a practical reminder that digital risk is no longer just a concern for large companies with complex IT systems. For Australian tradespeople, the most damaging cyber incident may be far simpler: a fake invoice, altered bank details, a compromised email account or a scam message that looks like it came from a supplier, builder, real estate agent or client. - read more
ASICs continuing focus on superannuation member services has put another practical issue in front of Australian workers: insurance inside super is not just about whether cover exists, but whether members can understand and use it when they need help. Recent regulatory attention on trustee administration, communication and claims support is a timely reminder for anyone relying on salary continuance or income protection benefits through their fund. - read more
Life insurance is an essential financial protection that provides peace of mind to policyholders and their loved ones. The premiums you pay are determined by various factors, including age, health, lifestyle, and occupation. - read more
Life is an unpredictable journey filled with twists and turns that can challenge even the most prepared among us. Sudden illnesses and unexpected injuries are just some of the uncertainties that can disrupt the harmony of family life. The emotional turmoil brought on by these circumstances is often compounded by the financial strain they can cause. It's during these trying times that the true value of peace of mind becomes clear. - read more
Life insurance is a financial product designed to provide a safety net for your loved ones and business in the event of your passing. At its core, life insurance aims to deliver financial protection by paying out a lump sum or ongoing payments to a designated beneficiary upon the insured's death. - read more
Life insurance serves as a crucial safety net, guarding your loved ones against the unforeseen. Just as you would take care of your health through regular check-ups, it is equally important to ensure that your life insurance policy remains in sound condition to provide the necessary protection. - read more
Shareholder agreements lay the cornerstone for stable business relationships and continuity in Australia. Acting as a contract among business owners, these agreements set forth the expectations, rights, and obligations of all parties involved. They are particularly vital in delineating clear paths for dispute resolution, succession planning, and the transfer of ownership shares under varied circumstances, including the untimely death or departure of a shareholder. - read more
Knowledgebase
Insurance Policy: Broadly, the entire written contract of insurance. More narrowly, the basic written or printed document, as distinguished from the forms and endorsements added thereto.
No comments yet. Be the first to share your thoughts.