03.Is it legal?
Australian anti-discrimination law
allows insurance companies to deny
cover to people with disabilities,
including mental illness, if the
discrimination is reasonable and based
on actuarial or statistical data that
shows a special degree of risk. But they
can also discriminate on the basis of
“other relevant factors”, including
commercial judgement or an applicant’s
The MHCA and beyondblue argue
that, even with this legal leeway,
the insurance industry may still be
breaching anti-discrimination laws
because its behaviour reflects a
fundamental misunderstanding of
Both organisations say
their numerous requests to the industry
for statistical and actuarial data relating
to mental illness have gone unheeded,
leading them to conclude that its
discriminatory behaviour may not be
based on reasonable assumptions.
Can you complain?
According to its terms of reference,
the FOS will consider complaints about
companies that refuse to provide general
insurance (which includes travel and
income protection) or impose special
restrictions on customers, but only after
the customer has tried and failed to
resolve the complaint through the
company’s own dispute process.
A FOS spokesperson explained that the service
“has limited jurisdiction in relation to
people not being able to get insurance
cover, and we don’t capture data on
people who have been refused coverage”.
In any case, people who have
experienced mental illness are
increasingly turning to FOS to help
them resolve financial services disputes.
In 2011-12, there were 444 “special
assistance” requests (which may have
involved insurance as well as other
financial services disputes), 26% of which
were mental illness related. In 2012-13,
there were 530 such requests, 49% of
which had to do with mental illness.
“We’ve had quite an increase across the
board,” FOS told us.
In cases where customers haven’t told
an insurer about a pre-existing mental
health condition, a FOS complaint
is not likely to result in a win. Under
the Insurance Contracts Act’s “duty
to disclose”, applicants are required to
reveal everything that
may affect the insurer’s
decision to accept the risk of
In a July 2013
decision, FOS ruled in favour of a travel
insurance provider that denied a claim
because the applicant failed to disclose
a history of depression, even though the
duty to disclose was buried in the fine
print of the product disclosure
The MHCA and beyondblue are
urging consumers who believe they’ve
been discriminated against because
of a mental health issue to obtain free
legal advice through the Public InterestAdvocacy Centre (PIAC), as well as beyondblue and fill out a
“tell us your story” form.