The Australian Financial Complaints Authority (AFCA) has found TAL Life has no grounds to reject a claim for critical illness benefit lodged by a policyholder who had aorta repair and replacement surgery in November 2016.

TAL had declined the claim in May 2017 on grounds that the claimant failed to disclose his medical history including problems with aorta root dilation, tingling or altered sensations, and major depression with suicidal ideation.

It said it would not have insured the complainant had the disclosures been made when the life policy was bought in March 2015 through an adviser.

TAL listed the conflicting answers provided by the complainant and his adviser to support its position before AFCA. In his application form the complainant said he “disagreed” with the answers but the adviser, when contacted by the insurer for further clarification, gave a copy of an earlier declaration that showed otherwise.

“The insurer’s submissions seek to play down the importance of the ‘I disagree’ responses,” AFCA says. “I reject those submissions.

“The declarations are of central importance. Although the declarations are sent to the insurer by the adviser, they are declarations of the complainant himself.

“If a person refuses to declare their answers are true and complete that is a very serious matter for the insurer.

“All insurers, including this insurer in particular, routinely rely on ‘I agree’ responses to this sort of declaration in non-disclosure and avoidance cases.”

AFCA decided that TAL must pay the complainant $365,400 less any premiums refunded, but include interest at the statutory rate from May 3 2017 until the claim is finally paid.

Click here for the AFCA ruling.