Insurer acted unfairly by relying on in-house doctor to assess cancer claim

The Australian Financial Complaints Authority (AFCA) has ordered AMP to reassess a trauma claim from a policyholder who was diagnosed with skin cancer, ruling the insurer acted unfairly when it relied on medical opinions from its in-house haematologist to review the claim, instead of an oncologist.

AMP had rejected the claim, saying a benefit payment is made only if there is metastasis under the terms of the policy.

AFCA says a claimant reasonably expects their insurer to fairly assess their claim and this can only be achieved if the insurer proceeds with “reliable” expert evidence to make a decision.

However, in this dispute, AMP did not ask the policyholder’s treating oncologist the relevant questions including whether his basal cell carcinoma (BCC), a form of skin cancer, has spread to a metastasis state. The policy only pays a benefit for BCC if there is evidence of spread, that is metastasis, to other parts of the body.

In the standard claim form to be filled out by treating doctors, there was no questions about metastasis.

AFCA says it is therefore not surprising that the treating doctor did not express an opinion about whether perineural spread amounted to metastasis.

The insurer instead relied on its haematologist, who says BCC “actually [has] a propensity to spread locally via perineural invasion” and that this “remains local invasion of tissue and is not metastatic spread”.

AFCA says there is no reason to think that that the haematologist is an expert on cancer.

“There is nothing to suggest that an opinion on whether particular kind of cancer amounts to metastasis is within [the haematologist’s] field of expertise,” AFCA says in its ruling of the complaint.

“Even if he was a cancer expert the treating doctors’ opinion is most important and should have been obtained.

“I am not satisfied, based on [the haematologist’s] brief and very informal notes, that perineural invasion is not metastasis.”

AFCA says it is beyond argument that the policyholder’s tumour had spread, noting he has “perineural spread” as diagnosed by his treating oncologist.

“That raises at least the possibility that the [policyholder] had metastasis, and therefore was entitled to the benefit,” AFCA said.

AFCA says the insurer should not have rejected the claim until it had completed a proper investigation, including finding out what whether the treating specialist thought that perineural spread amounted to metastasis or spread to a distant organ.

It says the claim has not been properly assessed against the Life Insurance Code of Practice, which has a minimum standard definition of cancer. The definition requires spread to the bone, lymph node, or another distant organ.

“The definition was not put to the treating doctors,” AFCA said. “It should have been.”

AFCA says AMP must compensate the policyholder $2000 for non-financial loss, noting the insurer’s conduct has caused a long delay. The claim was lodged in mid-2020.

AMP must also reassess the claim and in its reassessment, write to the policyholder’s treating specialist and put the definitions in the policy and code to them.

Click here for the determination.