The complaints ombudsman has ruled against a policyholder whose income protection benefit was reduced to zero because of an offset clause that stopped him claiming from more than one insurer.

Hannover Life Re accepted the IP claim in June last year after it was lodged that March. It determined the date of disability was July 27 2021 and started paying benefits under the superannuation-held policy.

But when assessing the man’s ongoing entitlements, the insurer discovered he had IP cover with another insurer and had been on claim with it.

Hannover obtained information from the other insurer that showed it had paid the claimant IP benefits for the maximum period of two years, which ended on September 24 last year.

Hannover then revised the claimant’s waiting period and IP benefit entitlement.

It offset IP benefits paid by the other insurance provider because the claimant received them for the same benefit period. It recalculated the IP benefit to be $0 and said it had overpaid the claimant $23,227, but it did not intend to seek recovery of the sum.

The claimant said he obtained IP cover from the other insurer and Hannover so he could receive benefits consecutively, not concurrently.

He said he was not made aware of the “offset clause” and was entitled to receive the maximum benefit of 24 months under the policy.

But the Australian Financial Complaints Authority says Hannover was entitled to apply the offset clause and the claimant authorised the insurer to obtain information to assess his claim.

“The panel is satisfied the [claimant] received two years of disability income under the IP cover he had with the other insurer,” AFCA says.

“Accordingly, the insurer was entitled to offset this disability income from his IP benefit.”

Click here for the ruling.