How far does a TPD claimant have to go to prove their claim?

In a TPD claim through superannuation there is no onus on the claimant to positively prove a claim. It is the duty of the superannuation trustee to assist the claimant with the claim and in their dealings with any insurer involved. The trustee must be independently satisfied that the correct decision is being made. This can mean that there is a positive obligation on the trustee to investigate the claim and seek further evidence on the claimant’s behalf. Where the insurer makes an incorrect decision there is a positive obligation on the trustee to assist the claimant to dispute the decision.

Acting in good faith

Parties to an insurance policy are required to act in good faith in their dealings with each other. The obligation of good faith requires the parties to act fairly and reasonably in accordance with commercial and community standards of decency.

The claimant under a superannuation TPD policy is a third party beneficiary to the policy. They are not a party to the policy. The parties are the insurer and the trustee.  However since 28 June 2013 a third party beneficiary is also required to act in good faith. The requirement only applies to a third party’s conduct post formulation of the policy. Therefore any contract of insurance entered into after 28 June 2013 or renewed after that date will attract a good faith requirement on the part of a third party beneficiary.

Responding to reasonable requests

A claimant is required to respond to reasonable requests for information by the trustee. The trustee or insurer may request the claimant attend an independent medical examination.  The claimant will generally be obliged to attend the examination. However if the request is not reasonable or relevant to the claim then a claimant may be entitled to refuse to undergo an examination. Any requests for provision of information must be necessary, reasonable and relevant to the claim.

What is an unreasonable request?

An example of an unreasonable request for information would include a requirement to provide tax returns or other financial documents when the level of income of a claimant is not relevant to a determination of TPD. If the tax documents are required to verify an employment history then the request may still be unreasonable if an employment history has been provided in another form either as part of the claim forms lodged by the claimant, by way of resume or provision of other documentary evidence.

Requests for participation in a face to face interview by an insurer can occur. If an interview request is made the claimant should inquire what the purpose of the interview is and what topics are proposed to be discussed. All claimants are entitled to be represented at the interview by a lawyer if they choose. A claimant does not have to submit to an interview where the insurer is not prepared to reveal the purpose or topics to be canvassed. If the claimant is unwilling to be interviewed some effort should still be made to determine the insurer’s requests and confirm that they have sufficient information to make a decision.

Insurers must act promptly

The duty of good faith requires that an insurer act promptly.  Late requests for information which should have been made soon after a claim was lodged may be able to be resisted.  So too if an insurer makes piecemeal requests that could have been requested at the same time, which have the effect of dragging out the assessment of the claim.

For example if an insurer sends an updated authority to you that you have already signed when lodging the claim that usually means they have not promptly acted upon the authority previously provided. Resistance to signing the updated authority will depend upon the relevance and importance of the information being sought.

A claimant should not be regarded to expend significant resources or money in obtaining for example medical reports or medical records requested by the insurer. The obligation on the trustee to assist the claimant may extend to paying for these types of records.

Requesting insurers to make a decision

Finally where an insurer or trustee refuses to continue assessing a claim because of the lack of provision of information by a claimant, the claimant can still insist on a claim decision being made.  Failure to provide information is no excuse for an insurer or trustee not to make a decision on the claim.