You’re offline. This is a read only version of the page.
Determination
Case number | 12-00-1079241 |
Financial firm | Southern Cross Benefits Ltd |
Case number: 12-00-1079241 27 September 2024
The complainant held a travel insurance policy with the financial firm (insurer). On 26 January 2024 the complainant claimed on his policy following the theft of his bag and other items while he was overseas.
In the course of assessing the claim, the insurer asked the complainant to provide its standard authority for release of information. The complainant declined to provide that authority. He says he has privacy concerns and asks the insurer to provide a summary of the information request/s and authorities for his consideration. The insurer also asked the complainant to provide his telephone number so it could discuss the claim with him. The complainant also declined that request. He says he will respond to the insurer’s questions by email.
The insurer says it is entitled to not assess the claim further unless the complainant fully cooperates. It says this includes providing its standard authority and his telephone number.
The complainant says he is willing to cooperate, and the insurer should assess his claim.
The insurer is not entitled to defer assessing the claim until the complainant provides the standard authority, and his telephone number for general claims discussion purposes. The insurer can provide authority/ies identifying the relevant person or organisation and the scope of the information sought (limited authority/ies) to the complainant for completion. Further, while the complainant is required to cooperate with the insurer’s reasonable request that he attend an interview, the complainant is entitled to have general claims communication be conducted by email.
The outcome is fair because the insurer is entitled to investigate the circumstances of the loss. It is fair that limited authority/ies are used where it would not limit the insurer’s reasonable investigation. It is fair that the complainant participates in an interview, if requested. It is also fair that the complainant provides his telephone number if relevant to the investigation, but that the insurer conducts general communication by email as requested by the complainant.
This determination is substantially in favour of the complainant.
If this determination is accepted by the complainant, the insurer is required to progress the claim by:
providing the complainant with limited authorities to complete. The authority/ies will identify the relevant person or organisation and the scope of information provided and sought
conducting general claims communications (for example, providing claim progression updates and other administrative communication) by email.
The insurer is not entitled to defer assessing the claim until the complainant provides the standard authority, and his telephone number for general claims discussion purposes. The insurer can provide authority/ies identifying the relevant person or organisation and the scope of the information sought (limited authority/ies) to the complainant for completion. Further, while the complainant is required to cooperate with the insurer’s request that he attend an interview, the complainant is entitled to have general claims communication conducted by email.
Following the complainant lodging his claim, the insurer requested the complainant to sign its ‘Privacy Act authorisation and declaration’ (standard authority) that includes the following:
You authorise:
SCTI to collect from and disclose to any person or organisation (including without limitation, medical practitioners, healthcare service providers, and other insurers), any further information reasonably required to consider eligibility for cover, evaluate and investigate the claim (including after claim payment), detect fraud, and you authorise those persons or organisations to disclose such information to SCTI as is reasonably necessary.
The complainant altered the form to require his prior authority for each request as follows:
You authorise:
SCTI to collect from and disclose any further information reasonably required to consider eligibility for cover, evaluate and investigate the claim, detect fraud, and you authorise those persons or organisations to disclose such information to SCTI as is reasonably necessary with my written consent in advance of any requests to third parties in an email to me summarising the request.
An insurer is entitled to investigate the circumstances of a claim and to reasonably assess the insured’s version of events regarding the loss. This is so it can make an informed decision as to whether the claim falls within the scope of the policy. The information sought must be relevant, reasonable and not unnecessarily invasive. If the complainant does not comply with the requests for information, the insurer may reduce or refuse to pay a claim.
The insurer says it is entitled to defer assessing the claim until the complainant completes its standard authority and provides his phone number. It says:
it is conducting an in-depth assessment of his claim and has referred it to its external investigators
it has told the complainant that the authority formed part of the process in accordance with the policy terms and conditions. Further, it said that the investigation required free and unfettered access to relevant third parties
it cannot commence the investigation without the complainant completing the unaltered standard authority and a contact phone number (so the claim can be verbally discussed)
by purchasing the policy, the complainant agreed to the terms and conditions of cover. This included the complainant clicking a box that said ‘Yes, I agree’ to the following declaration:
I authorise SCTI to collect personal information from and to disclose personal information to:
its privacy statement sets out how it collects, holds, uses and discloses personal information, explains why it needs the information and says it will not rent or sell his personal information to other companies
the authority form is consistent with the written format of the policy terms and conditions the complainant agreed to
it would be unfair to expect it to decide on cover with limitations on how relevant information can be obtained
its investigator will need to speak with the complainant about his claim and required a contact number to do so.
The complainant says:
he is willing to cooperate with the insurer’s investigation: However, it is not reasonable for the insurer to:
> contact anyone, based on its election as to whether it is relevant to his claim, without his knowledge and approval
> continue to investigate after a claim is completed
his alterations to the insurer’s authority form do not limit the insurer’s ability to obtain information. It merely delays the insurer’s ability to obtain that information
he has privacy concerns with providing such broad authority to the insurer to access his personal information without his express permission
given how privacy and information is now so easily breached, he has significant concerns about his personal information being accessed without his express permission
he requests any questions put to him are by email and not over the phone.
This matter involves striking a balance between the complainant’s privacy concerns and the insurer’s investigation not being prejudiced by limitations on its access to information. I accept that the effect of the complainant’s rewording of the standard authority is that, in its current form, it provides the insurer with no authority to access information at all.
There is no doubt the policy terms require the complainant to authorise the insurer to disclose the complainant’s personal information to and collect that information from third parties. However, the Privacy Act 1988, General Insurance Code of Practice (GICOP) and good industry practice requires that the information sought and disclosed be reasonable and relevant to the claim. In particular, the Australian Privacy Principles allow collection of personal information only where it is reasonably necessary for one or more of the insurer’s functions or activities. Further, section 203 of GICOP requires the insurer to explain to the complainant why he should give it authority to access information from a third party.
Having considered the exchanged information I am not persuaded that the insurer is entitled to defer assessing the claim until the complainant completes its standard authority. Rather, it is reasonable that the insurer provides the complainant with authority/ies identifying the relevant person or organisation and the scope of the information sought (limited authority/ies). That is because:
the insurer’s standard authority is drafted in very broad terms. It effectively authorises the insurer to obtain any information from anyone, and relies on the third party to assess what is ‘reasonably required’ for the insurer to investigate the claim
while noting the protections afforded by the Privacy Act 1988 and GICOP, I accept that the complainant has privacy concerns about the scope of the standard authority
beyond saying it is investigating the claim, the insurer has not explained to the complainant, as required by GICOP, why he should authorise access to any particular information
the insurer has not shown how its investigation would be prejudiced by the complainant providing limited authority/ies
while requesting limited authority/ies from the complainant presents a greater administrative and time burden for the insurer, it has not shown that doing so would inhibit its ability to investigate the claim or is otherwise unworkable or particularly onerous
in the absence of the insurer providing reasons to the contrary, the complainant is entitled to know the parties to whom information is being provided to and sought from, its scope, and the opportunity to consent to each
the policy entitles the insurer to decline the claim if the complainant refuses to provide an authority in relation to reasonable and relevant information.
Accordingly, the insurer is not entitled to defer assessing the claim until the complainant completes its standard authority form. It is to provide the complainant with limited authorities to complete. The parties are encouraged to work together to progress resolution of the claim.
I do not accept the complainant’s position that he is no longer required to cooperate with the insurer’s reasonable and relevant investigation once the claim is completed or that he is entitled to limit his authority/ies to the claim decision period. That is because, in certain circumstances, the policy entitles the insurer to recover payments made to the complainant, or someone else.
The insurer has said that the complainant has refused to cooperate with the insurer by refusing to provide his contact phone number. It says this causes difficulties in general claims communication and inhibits the investigator speaking with the complainant about his claim. I am also not persuaded that it is reasonable for the insurer to defer assessing the claim unless the complainant provides his telephone number for general claims communication purposes. It is reasonable that the complainant elects how he would like to receive and respond to general claims communications. Further, the insurer has not shown how email communications restrict the insurer’s general interactions with the complainant or its ability to assess his claim. Having said that, I am leaving open the possibility that the complainant’s phone number and/or phone records will be relevant to the claim and, in that case, that information should reasonably be provided upon the insurer’s request.
The complainant has said he would like all questions to him to be provided by email and has refused to provide his phone number. The insurer says it wants its investigator to discuss the claim with the complainant by phone. If the insurer wants to interview the complainant it needs to comply with GICOP, including explaining the purpose of the interview to the complainant.
The policy requires the complainant to give it the information it needs and the complainant has a duty to cooperate. This may require the complainant to participate in an interview with the insurer’s investigator face to face or by phone.
The outcome is fair because the insurer is entitled to investigate the circumstances of the loss. It is fair that limited authority/ies are used where it would not limit the insurer’s reasonable investigation. It is also fair that the complainant not be required to conduct general communications by phone.
AFCA has determined this complaint based on what is fair in all the circumstances, having regard to:
the legal principles
applicable industry codes or guidance
good industry practice
previous decisions of AFCA or its predecessor schemes (which are not binding).
The respective parties have completed a full exchange of the relevant information, and each party has had the opportunity to address any issues raised. We have reviewed and considered all of the information the parties have provided.
While the parties have raised a number of issues in their submissions, we have restricted this determination to the issues that are relevant to the outcome.
AFCA is not a court of law. We do not have the power to take or test evidence on oath, or to require third parties to give evidence.
When we assess complaints, we consider:
available documents
the recollections of the parties
all relevant circumstances.
We give more weight to documents created at the time the events occurred. If there are no relevant documents, we will decide what most likely occurred based on the available information.
If there are conflicting recollections and these are evenly weighted, we may find that a claim cannot be established.
