A Westpac life policyholder whose claim for rheumatoid arthritis benefit payments last year was unsuccessful after the insurer retrospectively applied an exclusion for the ailment has lost his complaint.

The Australian Financial Complaints Authority (AFCA) says the insurer has the right to vary the cover since the policyholder did not comply with his disclosure duty before he took out the policy in August 2016.

AFCA says he did not disclose all relevant matters about his medical history, answering “no” to a number of questions in his application form, including whether he has or ever had rheumatoid arthritis or other type of arthritis.

The policyholder did consult his general medical practitioner twice in 2011 about having joint pain, tenderness and early morning stiffness in his ankle and finger. In 2015 he again sought medical consultation for early morning stiffness and pain in the joints of his hands.

His doctor identified a positive rheumatoid factor from his blood test and noted sore joints and a family history of rheumatoid arthritis.

Joint x-rays showed the policyholder having early osteoarthritis, degenerative cysts in the left hand in keeping with early osteoarthritic change, and a marked osteoarthritic change in the big toe joint of the right foot.

His telephone consultation with his doctor about his subsequent test results suggested inflammatory arthritis, possibly rheumatoid arthritis and the need to have a correct diagnosis with referral to a specialist.

The policyholder also answered “no” in the application form when asked if he has had tests, consultations and operations that resulted in diagnosis of a medical condition, disorder or advice to undergo further examinations.

“Parts of this question therefore required a ‘yes’ answer even if the complainant did not have a diagnosis of a medical condition,” AFCA said in its ruling.

“The insured is required to disclose matters ‘known’ to them. Where an insured person did not know that a matter would be relevant to the insurer, the test is whether a reasonable person in the circumstances could be expected to know.”

AFCA says the insurer would not have entered into the policy if the policyholder had disclosed his history of medical consultations with his doctor.

Westpac took his answers to the questions posed in the application form into account when deciding whether to offer him cover, AFCA said.

AFCA says it has reviewed the Westpac’s underwriting guidelines and opinion offered in relation to why its position on rheumatoid arthritis is not inconsistent with other “reasonable and prudent” insurers.

It says it is satisfied the insurer has shown that if the complainant had properly disclosed the matters asked in the application form, then it would not have offered the policy to the complainant on the same terms that it did.

Click here for the ruling.