An income protection (IP) policyholder who refused to sign a form giving his insurer “broader” authority to obtain information from any health provider to continue assessing his claim has won his dispute. 

AIA wants him to sign its standard Authority to Release Medical Information form, saying the document is the “same authority [it] requests from all customers who have lodged a claim”. 

But the policyholder, who has been receiving benefits under the policy since around 2012, says his psychiatrist has been providing written reports, at AIA’s request, for nine years to assess his claim and did not ask for any other medical information. 

He offered and prepared his own forms authorising his psychiatrist to provide written reports to AIA last June but the insurer told him the following month that it would no longer assess his claim unless he signed the standard form as requested. 

He took his case to the Australian Financial Complaints Authority (AFCA) last August and the ombudsman found in his favour, ruling the policy did not require him to sign the insurer’s standard authority form and that AIA’s position was not consistent with the industry’s Code of Practice. 

During the AFCA process another authority was provided in November after the ombudsman asked the insurer why it would not accept the initial non-standard authorisation letter provided by the complainant. 

“The insurer does not dispute that the authority addressed the concerns it raised, and has not given any other reasons why the authority is insufficient,” AFCA says. 

The ombudsman says the Code “clearly states a policyowner can authorise the insurer to request ‘particular information from particular sources’ as an alternative to providing a ‘general authority’.” 

“This is what the complainant has done. The policy does not require the complainant to sign a standard authority form,” AFCA says in its ruling. 

“The Life Insurance Code of Practice says the complainant can provide a more limited authority. The complainant is not required to sign the insurer’s standard authority form.” 

AIA says there could be a delay in assessing the claim if it needs the complainant to provide a “further authority”, but AFCA notes the Code specifically says “a policyowner can provide a limited authority, even though this may delay the assessment of their claim”. 

AFCA also points out that AIA “admits it does not need any of this information to assess the claim, and it is only seeking access to it in case it needs it in the future”. 

“The insurer is demanding the authority to access sensitive medical information. This is unfair and unreasonable,” AFCA says. 

“The complainant is not required to authorise the release of this information. The insurer is not entitled to require this authority as a condition of fulfilling its policy obligations.” 

AFCA says the policyholder has authorised the release of all the information the insurer needs to assess the claim and that it must assess the claim and pay him the benefits the policy entitles him to. 

And if the insurer needs further information to assess the claim in the future, and it needs the complainant’s authority to obtain this information, it may ask the complainant to provide this, AFCA says. 

AFCA also ordered the insurer to compensate the complainant $2000 in non-financial loss for “mishandling” the claim. AFCA says the insurer’s conduct has “caused the complainant mild stress and inconvenience over a long period of time (July 2022 to now)”. 

Click here for more from the ruling.