A complainant who claimed inappropriate advice from a representative of Westpac led to her buying polices that did not cover her for anxiety or depression has lost her dispute before the Australian Financial Complaints Authority (AFCA).

She had approached the representative in 2015 about her personal insurance needs, eventually buying total and permanent disablement (TPD) and income protection (IP) policies that year.

The insurer declined to respond to a claim for anxiety and depression in March 2018 because the conditions were apparent when the policies commenced three years ago.

The claimant says when she completed the application form for the policies, she had answered “yes” to questions on whether she had consulted health professionals or received counselling about any mental health conditions.

She says she did not believe she suffered from a mental condition but had “ticked” the boxes out of an abundance of caution.

The representative had told her the insurer would review her medical records during the approval process and that her medical history would not impact her cover after the policies were approved.

The IP policy was cancelled in April 2018 and reinstated with conditions, with the change in terms regarded as a decision of the insurer.

While AFCA agreed with its case manager that the representative did not provide the woman with appropriate advice, it has not been demonstrated how his actions have led her to suffer a loss.

AFCA says the woman has not established that she would have been able to obtain insurance from another insurer at that time that would have covered a pre-existing health condition.

“I acknowledge [the representative] ought to have explored further the nature of [her] mental health history and expectations for cover,” AFCA ruled.

“However, the insurer was on notice about the mental health issue and still offered [her] the insurance policies.”

AFCA says the onus is on the woman to prove alternative cover would have been available in 2015, the year she bought the policies.

“There is no adequate information available to me to support [her] submission in this respect,’ AFCA said. “Overall I am not satisfied [the representative’s] conduct caused [her] to suffer a loss.

“From the information available to me, the onus was on the insurer to work with [her] to better understand the response on the application form to mental health conditions before proceeding with the policies.”

Click here for the ruling.