In a recent case before the District Court in Brisbane, a life insurer, TAL Life Limited, argued that despite using the incorrect definition of total and permanent disablement in rejecting a claim, they had not made any mistake in forming their opinion.
In the matter of Wilkin v TAL Life Limited & Anor  QDC 157 it was held that the definition relied upon by TAL incorrectly used the expression “regular remunerative work for which he or she is reasonably suited by education, training and experience”. The correct definition was relevantly any “occupation” based on the skills and knowledge the person has acquired through previous education, training and experience.
The distinction was important because of the differing terminology in using “regular remunerative work” as opposed to “occupation”, and the difference between suitable ETE as opposed to simply ETE that had been acquired.
In addition the Court found that on a proper reading of the insurer’s decision as a whole, TAL either knowingly excluded or failed to consider relevant information concerning medical matters in forming its opinion to reject the claim.
In defending the claim the insurer refused to concede that it had made an error by referring to the incorrect definition. Mr Wilkin was however successful in setting aside the determination made by the insurer accordingly.
It follows that where an insurer has made a fundamental error such as referring to the wrong definition, then that error cannot be cured by other reasoning that might be reasonable in the circumstances.
It is unfortunate that TAL Life in this case decided to defend its decision despite using the incorrect definition. It seems that when it suits a life insurer it will rely upon the technicalities contained in a policy, but when it does not suit them it is okay to waive substantial errors if they are made by the insurer.
The inherent imbalance between an insurer and an insured person is such that the insurers must be held to account in these sorts of circumstances. Mr Wilkin’s stand in challenging the decision of the insurer is commendable.
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Adam Tayler is a Partner in Turner Freeman and managers the Brisbane and Cairns offices. Adam specialises in disability insurance and superannuation claims and he is also the manager of Super Claims Australia which is a Superannuation & Disability Claims specialist business conducted by Turner Freeman Lawyers.
Adam has authored various papers and presented to many legal education programs involving Workers Compensation and Insurance. Adam is a committee member of the Queensland Branch of the Australian Lawyers Alliance.