The Australian Financial Complaints Authority has told MetLife to reassess a complainant’s income protection claim after overruling its decision to apply a mental health exclusion.

The claimant arranged his cover through his superannuation, applying in March 2020 for a $9300-a-month policy with a two-year benefit period. 

The man had been declared medically unfit to work by his GP in August 2019 after suffering “significant psychological distress”, some of which stemmed from workplace bullying.

He took annual leave that month and paternal leave in October 2019, then returned to work in October 2020 before stopping again in December. 

In September 2021, he lodged a claim for income protection coverage for a diagnosed adjustment disorder with mixed anxiety and depression that prevented him from working. 

MetLife declined this claim in July 2022 and said the man had misrepresented his medical history by stating when applying for the policy that he had not been “diagnosed with or sought medical advice or treatment” for psychological or mental health conditions.

The insurer noted the complainant was already treating the psychological distress that caused his prolonged absence from work and it would not have accepted him for the cover if this was disclosed. 

It said his condition was akin to depressive and anxiety symptoms and could “reasonably be considered a psychological condition”.

The complainant said he did not believe he had a history of psychological or mental health conditions at the time of the application, and nor would any reasonable person in the same circumstances.  

AFCA says the complainant was suffering “significant stress in 2019, but ... stress does not necessarily equate to a psychological or mental health condition, as that expression would be ordinarily understood”.  

It says its decision does not examine whether the complainant had a condition at the time of the application, but whether he knew of it.  

AFCA says the treating GP did not consider it necessary for the man to undertake the testing that would commonly be conducted when a patient presents mental health symptoms.  

The only relevant “treatment” the man had was to remove himself from the workplace. AFCA says a layperson would not have understood that his symptoms indicated a mental health condition.

“Even if the answers given [on the policy application] 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.” 

MetLife must assess the insured’s claim and advise the trustee, Hostplus, of its decision within 60 days of the determination. Click here for the decision.