The Insurance Reform Advisory Group (IRAG) has coordinated a working party to examine the obstacles experienced by Australians with mental illness when accessing or making a claim upon certain general insurance products.

This work comes in the wake of a Report released by the Mental Health Council of Australia and beyondblue (the national depression initiative) which details the results of a survey that focused on the experiences of people with mental illness when dealing with the insurance industry.

A joint initiative called the Mental Health & Insurance Project between the Mental Health Council of Australia (MHCA) and beyondblue conducted a survey of consumer experiences in the insurance space. The survey found that many people with mental illness have experienced discriminatory practices when dealing with the insurance industry.

Report on Mental Health, Discrimination & Insurance

The survey Report states that respondents reported they had difficulty in applying for, or making claims against insurance products, including income protection and travel insurance products. Barriers to access to insurance include: outright refusal by insurers in response to applications by respondents for insurance products; prohibitive premiums and excesses; and blanket exclusions for certain conditions which do not take a particular individual’s illness history, current health status, and prognosis into account.

The tensions between the treatment of mental illness and routine insurance practices are also highlighted in the Report. It was noted that insurance claims’ processes have the potential to produce counterproductive outcomes for insureds with mental illness. For example, the stress associated with prolonged claims processes may exacerbate symptoms for those suffering from depression and bipolar disorder. Contradictions between the management of good mental health outcomes and insurance practices were also identified by the Report.

IRAG examines insurance industry processes relating to mental health

The IRAG (chaired by the Hon Bill Shorten Minister for Financial Services) has coordinated a working party comprising representatives from government, insurance, and the mental health sector to investigate the interplay between key mental health issues and current insurance processes.

The IRAG working party is now examining whether:

  • insurance reform is needed to improve education about mental health and insurance processes for stakeholders in the community and in the insurance industry;
  • mental health conditions should be standardised so that they may be more easily categorised by underwriters;
  • voluntary guidelines should be developed for the insurance industry in order to address some existing areas of concern with the way that mental health issues are dealt with by insurers; and
  • a more effective complaints process should be developed to deal with some of the issues specific to claimants with mental illness.

In light of recent proposals for regulatory reform to improve access to insurance for older Australians, further developments aimed at addressing insurance issues for Australians living with mental illness are likely.