Insurers could find themselves hauled before the Australian Human Rights Commission this year for discriminating against policyholders because of mental health conditions such as anxiety and depression.
Not-for-profit mental health organisation BeyondBlue has been working with the Public Interest Advocacy Centre on several cases and has at least 60 strong cases indicative of discrimination.
BeyondBlue CEO Kate Carnell told Insurance Business the cases would be taken to the Australian Human Rights Commission this year.
“We are assessing those cases and the first ones are very close to going to the Australian Human Rights Commission,” she said, but added: “We have determined that we will run cases by the Commission one by one in the first instance although we have not ruled out a class action in the long term.”
Insurance companies can deny coverage to people with disabilities if the discrimination is reasonable and based on actuarial or statistical data that shows a “special degree of risk”. They can also discriminate using other factors such as a commercial judgement or an applicant’s particular circumstances.
However, BeyondBlue says that insurance companies’ have acted in a way that shows a distinct lack of understanding of mental health, and its request for statistical and actuarial data relating to mental illness have been rebuffed.
Research by BeyondBlue and the Mental Health Council of Australia in 2011 found that only four of 29 brands surveyed cover travel insurance claims relating to mental illness. They are: Cover-More, CGU, BUPA and NRMA, and all but Cover-More are distributed by GU.
The Financial Services Council last year brought in a new standard whereby life insurance members introduced a standard level of metal health awareness training among their employees.
Carnell praised the FSC but added the insurance industry needs to do more.
“The FSC accept that there is an issue and so they are progressing with that. We are pleased with the movement that has been made, we just need more.”
She criticised the industry for having little understanding of mental health issues, “bundling them all into one big pot”.
“If insurers don’t understand the issue the decision making process is flawed. If they are better trained in telling the difference between a low risk and high risk one, the system is better.
“We are not saying that mental health issues are not a risk to insurers but insurers are not assessing the difference between risks.
“Lots of people are treated for depression and stress but never have a day off. They get proper treatment and get on with their lives.”
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