The Australian Financial Complaints Authority (AFCA) has awarded a policyholder $2000 compensation after finding her insurer has taken too long to assess a total and permanent disability claim.

The woman claimed for about $1.69 million in May 2022 because she could no longer work.

The Life Insurance Code of Practice stipulates that insurers should make a decision within six months unless “unexpected circumstances” arise that extend the deadline to 12 months.

TAL Life Insurance told AFCA its decision had been delayed because it was investigating inconsistencies in the woman’s employment. The insurer did not accept she had been – as stated – an occupational therapist, noting social media activity that indicated she had been working as an interior designer or renovator.

TAL cited media clippings showing the woman was part of an interior design business before leaving in September 2016, which was her last listed job. It also provided records it said showed the woman was a director at one or two companies between 2016 and 2018.

The claimant said interior design was only a hobby and the insurer was bound to treat her employment as occupational therapy based on a previous complaint she made to AFCA about income protection.

The complaints authority accepts there was a “reasonable basis” for the insurer to investigate the woman’s occupation. It says the previous complaint only examined whether she was fit to work as an occupational therapist, but did not establish it as her job.

TAL said it required business and tax records from the associated companies and sought a phone call between its in-house doctor and the claimant’s doctor.

The ruling says the insurer’s requests are reasonable but its assessment should now be completed quickly and with the complainant’s co-operation.

It says TAL has already unnecessarily delayed the claim.

“Some of that delay was unavoidable and was caused by the number of issues being investigated,” the authority’s adjudicator said.

“Taking all of the evidence into account, I am satisfied the insurer is to blame for a significant part of the delay. Its insistence on the complainant providing the records of Company A and Company B, after she said he could not access them, was unreasonable.

“With the claim now nearly two years old, it is important that the insurer complete its assessment as soon as possible.”

Click here for the ruling.