In October 2015, we published “Don’t Be Hasty – Duties and the Common Pitfalls for Trustees and Insurers” (view here) which looked at the duties of insurers and trustees in assessing TPD claims and the common mistakes made. We concluded that the duty of utmost good faith owed by insurers/trustees requires them to generally, ensure all evidence is reviewed and considered, that procedural fairness is issued, to resolve competing bodies of evidence by obtaining additional evidence and to make timely decisions. There is, however, no obligation to establish a life insured’s entitlement to a TPD benefit.
Robb J, in Panos v FSS Trustee Corporation, Robb J stated that the process applied by an insurer (or trustee) is “akin to an administrative determination… it is not adversarial”. Robb J stated that a life insured is required to provide materials to assist the insurer/trustee to reach necessary satisfaction.
His Honour explained that the process taken by an insurer/trustee is inquisitorial and could be described as being collaborative. For example, although the life insured has a burden to put sufficient material before the insurer/trustee, it is not expected to bear the cost and burden of a full forensic investigation. Robb J explained that the nature and amount of material the life insured will be required to provide to the insurer/trustee, will of course, depend upon the facts of each case. He commented that in many cases, the relevant factual and medical evidence is likely to have been accumulated over time, in the ordinary course of the life insured’s employment, his or her illness/injury and during the steps taken to seek treatment.
Although additional expert medical and/or other opinions may be required to properly establish and/or assess the life insured’s claim, it is likely to be sufficient for the life insured to supply the material that has been procured over time and to rely upon the insurer/trustee to exercise their duty of utmost good faith and bear the cost and onus of commissioning expert evidence (if necessary).
In a practical sense, a life insured simply has a burden to put sufficient material before the trustee/insurer to establish a prima facie claim for determination. Whereas, the insurer/trustee will need to take all appropriate steps with respect to the investigation and determination of the claim in order to comply with its duties of utmost good faith. This may come at a cost.