TAL paid a private investigator to follow a former nurse and record her every move as part of an attempt to discredit her and void an income protection policy, the Hayne royal commission has heard.
The private investigator was engaged by TAL in 2012 after more than three years of disputes, as the insurance company resisted paying out the claim even after being ordered to pay her plus interest by the regulator.
The reports would include details about her trips to the pool, the strokes she used swimming and the types of swimsuit she wore. They also included information about her partner and detailed moments of physical affection.
Surveillance, lying and bullying
Counsel assisting Rowena Orr, QC, took TAL’s general manager of claims Loraine van Eeden through an extraordinary chain of events involving surveillance, lying to the regulator and outright bullying of the insured to the detriment of her mental health.
“We’ve paid over 25,000 claims and I have never seen one handled in this way before,” Ms van Eeden said.
The intensive care nurse would make a claim in 2010 after being diagnosed with generalised anxiety disorder. She was caring for a partner who suffered from mental illness and was witness to a violent episode in her own home.
TAL had estimated that it was on the hook for as much as $792,000. On receipt of the claim, it immediately began a process of trying to void the policy.
TAL began by seeking a retrospective underwriting opinion including tax records to see if she was lying about her income and medical records, to see if she had any pre-existing medical history that wasn’t disclosed.
The claims handling team would access her medical records including counselling services she used at work and used the records to deny her claim based on the false conclusion that she was suffering from pre-existing work-related stress.
TAL sent her an email in July 2010 saying that if she disclosed this in her application her policy would have been declined and the matter was now being referred to its legal team. The following month she was refunded the premiums paid of $2,515.17.
By the time the claim was escalated to the Ombudsman, the reason for rejecting her claim would be changed to a failure to disclose a history of depression and anxiety based on loose and incorrect interpretations from medical file notes.
All of the doctors would reject the interpretations made by TAL. One would underscore the point by asking the insurer to stop inferring. “Please do not read between the lines for the medical history recorded and make ill-informed decisions,” read one doctor’s letter to the insurer.
Internal discussions between TAL employees show the company knew that the Ombudsman was likely to “put it to the sword” describing the case as a “100-1 shot”, but it persevered regardless.
The Ombudsman found against TAL and TAL eventually paid up $89,000 and would some time later make additional payments in interest.
With the dispute now seemingly resolved, a case manager would inexplicably approach a private investigator and ask them to commence surveillance. The case manager specifically asked the investigator to visit her former workplace as well as approach local police.
“Was TAL looking for a reason to stop paying her claim?” Ms Orr asked.
“It seems like it, yes,” Ms van Eeden replied.
The case manager at TAL demanded that the insured fill out a daily activities diary, implying that her payments would be delayed if she did not comply. The insured did so against medical advice and would muse about self-harm in the diaries.
In March 2014, TAL would write to the insured, informing her that her benefits could be cut off and accused her of fraud.
The correspondence included details of the months of surveillance conducted by TAL and said she would be pursued for $69,000 in repayments.
TAL’s Ms van Eeden will return to the witness box tomorrow to give more evidence about the case study.