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Insurance industry put on notice off the back of mental health enquiry

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SANE Australia is calling on the insurance industry to cease all practices that have been found to discriminate against people with mental illness, off the back of findings from a parliamentary inquiry into the life insurance industry released yesterday.

The Joint Parliamentary Committee on Corporations and Financial Services has made a series of recommendations including a mandatory and enforceable Code of Practice in relation to life insurance claims for those with mental illness and related issues.

SANE Australia General Manager Research, Policy and Programs Dr Michelle Blanchard, who gave evidence at the Inquiry, says people with mental illness deserve to be treated fairly when it comes to accessing insurance.

“The practice of denying insurance coverage for people living with mental illness, or requesting they pay higher premiums, is unacceptable,” Dr Blanchard said.

“More and more we are seeing people living with mental illness face enormous challenges in accessing insurance products which leaves them feeling distressed and discriminated against.

“We also are seeing people being denied insurance, or receiving higher premiums, simply because they’ve accessed mental health services in the past.

“Accessing mental health services should never lead to discrimination as it can prevent people from seeking help.”

People living with complex, or more severe, mental illnesses, including schizophrenia, bipolar, personality disorders, PTSD, OCD or severe depression and anxiety, accessing insurance can seem impossible.

Several SANE Speakers living with mental illness anonymously shared their experiences of trying to accesses insurance as part the inquiry.

One individual was rejected by 12 insurance companies when applying for life insurance.

“I was asked if I had either bipolar disorder or schizophrenia and I explained that I had both because I have schizoaffective disorder and I was then told that I was ‘uninsurable’.

“It was a harrowing process but eventually I did get insurance with a company but I'm paying twice what most people pay.”

Another SANE Speaker felt exposed to stigmatising attitudes by a doctor from an insurance company during the application process.

“I said that I wanted to have extra cover for my family if I was diagnosed with cancer or if I had a car accident, for example.

“He made the comment that someone with a psychiatric condition may be experiencing depression which could cause them to deliberately crash their car.

“This was the first time that I had ever felt stigmatised and I could not believe that a health professional was saying this to me.”

Dr Blanchard said that SANE Australia has welcomed the findings and recommendations from the inquiry and is now committed to working with the Financial Services Council and the insurance industry to develop the Code of Practice.

Findings from the inquiry recommend that the Financial Services Council consult with insurers and the mental health sector to discuss requiring insurers to:

  • ensure that applications for insurance that reveal a mental health condition or symptoms of a mental health condition are not automatically declined
  • refer applications for insurance that reveal a mental health condition or symptoms of a mental health condition to an appropriately qualified underwriter
  • give an applicant for insurance the opportunity to either withdraw their application or provide further information, including supporting medical documents, before declining to offer insurance or offering insurance on nonstandard terms
  • where an insurer offers insurance on non-standard terms, for example, with a mental health exclusion or a higher premium than a standard premium, specify:
    • how long it is intended that the exclusion/higher premium will apply to the policy
    • the criteria the insured would be required to satisfy to have the exclusion removed or premium reduced
    • the process for removing or amending of the exclusion/premium
    • develop, implement and maintain policies that reflect the above practices.

– ENDS –

To arrange an interview with Dr Michelle Blanchard contact:

Danielle Bombardieri
Phone: 0400 100 978
This email address is being protected from spambots. You need JavaScript enabled to view it.

SANE Australia is a national mental health charity working to support four million Australians affected by complex mental illness including schizophrenia, bipolar, borderline personality disorder, eating disorders, obsessive compulsive disorder, post-traumatic stress disorder and severe depression and anxiety.

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