TAL breached professional standards and its actions fell below community expectations when it tried to halt income protection policy payments for a nurse who was suffering depression and anxiety, the Hayne royal commission heard last week.

The woman faced scrutiny from TAL over concerns she had not disclosed previous stress-related issues before taking out the policy, but the issue was decided in her favour by the Financial Ombudsman Service (FOS).

The commission heard TAL, which had an estimated liability for the case of $792,000, later asked a private investigator to become involved.

Surveillance included desktop social media searches, photos and videos and “very personal and highly intrusive” descriptions of her attending libraries, shopping, swimming and being affectionate “with a male person who was in a very close relationship with the claimant”.

The woman was also asked to keep a daily diary, despite her concerns that this would cause her extreme distress, as TAL sought to disprove the entitlement.

A decision to end the policy, based on the surveillance, and concerns over the diary, again went to FOS. TAL ultimately accepted a recommendation that it keep paying the claim and agreed at the royal commission that its behaviour over the activity diary constituted misconduct.

TAL Claims GM Karen van Eeden agreed TAL had “deployed bullying tactics and offensive communications with the insured and others acting on her behalf”.

The insurer also came under fire for its handling of a case where it sought to avoid income protection policy payments for a woman diagnosed with cervical cancer who had accidentally omitted to mention previous problems with depression when taking out the policy.

Earlier in the hearings, CommInsure was criticised for declining a claim related to cancer as the procedure did not involve removal of the entire breast and as a result didn’t meet its definition of radical surgery.

Counsel Assisting Rowena Orr said CommInsure was relying on a definition that was about 18 years old, and when it was later changed it was not backdated.

Life insurer Clearview was scrutinised for pressure-selling tactics that targeted poorer people, while the company also agreed it had breached anti-hawking laws against unsolicited calls more than 300,000 times over a three-year period.

“We didn’t understand that we were breaching the anti-hawking rules,” ClearView Chief Actuary and Risk Officer Gregory Martin said. “We made a mistake.”