Mental health discrimination by insurers: new report calls for urgent ASIC investigation

The Australian Securities and Investments Commission (ASIC) should immediately investigate how life insurers treat people with past or current mental health conditions, in response to continuing widespread discrimination by life insurers.

This is a media release from the Public Interest Advocacy Centre. It was originally published on 8th November, 2021.

This is a key recommendation of Mental Health Discrimination in Insurance – which is the culmination of ten years of work by PIAC’s Mental Health and Insurance Project.

‘Despite several major inquiries recommending reform, we continue to see people with a mental health history denied insurance or offered cover subject to broad, unreasonable exclusions, in the absence of clear evidence to support these practices,’ said Ellen Tilbury, Senior Solicitor at the Public Interest Advocacy Centre. ‘This includes where a person has seen a counsellor once or twice, because they felt anxious or depressed following a relationship breakdown and have received no diagnosis of a mental health condition.’

Together with Beyond Blue, Mental Health Australia and SANE Australia, PIAC has been tackling systemic problems in the way insurers design, price and offer policies and assess claims to the detriment of people with past or current mental health conditions.

Today’s report consolidates concerns raised by the Productivity Commission, and several major inquiries including the Financial Services Royal Commission, and the Victorian Equal Opportunity and Human Rights Commission that have examined these unfair and potentially unlawful practices.

PIAC’s report finds that while there have been improvements in travel insurance in recent years, there are still persistent problems with life insurance products such as income protection insurance and total and permanent disability insurance.

The report also calls for a number of other measures to enhance industry accountability, including increased transparency in relation to the actuarial and statistical data relied upon by insurers to make their decisions, changes to the Life Insurance Code of Practice and improved dispute resolution processes.

Almost half of all Australians have experienced a mental health condition, and insurance is a vital service that many rely upon to protect their financial security and ultimately their wellbeing.

‘It is a matter of public interest that insurance providers act fairly and without discrimination, basing their decisions on robust evidence and contemporary understandings of mental health,’ said Ellen Tilbury.

‘We don’t believe that change will occur unless underwriting practices relating to mental health come under the scrutiny of ASIC – the appropriately empowered regulator.’

‘If insurers don’t lift their game, there is a real chance people will be discouraged from seeking essential treatment for common conditions like anxiety and depression, for fear of being locked out of insurance,’ added Ellen Tilbury.

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