Insurance company TAL paid $20,000 to a private investigator to pursue a nurse who six months earlier had been found entitled to claim income protection insurance by an independent ombudsman, the royal commission has heard.
The woman took out income protection cover with TAL in early 2009. Later that year she was unable to work due to stress and anxiety and lodged a claim.
That was rejected and TAL voided her policy, saying she had not informed it of earlier bouts of stress-related absence from work.
She took her case to the Financial Ombudsman Service, which backed her against TAL’s consistent opposition and eventually, in May 2013, it reinstated her policy.
She was paid $2750 per month in income replacement but the company resented paying. A TAL manager arranged surveillance by a private investigator for four months to March 2014.
“We see that the case manager wanted to try and support her theory that the insured’s position as a full-time carer for her partner was work, which would disqualify her from continuing to receive payments,” counsel assisting Rowena Orr QC said.
“Yes,” replied TAL executive Loraine van Eeden.
The woman was at that point entitled to payments of $792,000 over the years until she turned 65.
It emerged that as part of the brief the private investigator “was being asked to go to the hospital and, under some pretext, seek information about the insured, wasn’t he? Perhaps posing as a family member or a friend?” Ms Orr observed. He was also instructed to go to the local police station to find information.
Ms van Eeden agreed that was “all inappropriate”.
The investigator searched the internet, government records and social media for information on the insured woman. Then he provided TAL with pictures and videos, along with information that was “detailed and often very personal”, Ms Orr said.
That information included the following: “During the surveillance period, the claimant was observed on three separate occasions conducting a presentation and selling her book.”
“The presentations were conducted at the libraries of each country town. She was also observed carrying out her normal day-to-day activities in company with a male person who was in a very close relationship with the claimant, who was observed holding hands, kissing and stroking the body of the male person.”
Following the surveillance TAL accused the woman of fraud, told her it would cut off her payments and said she would have to repay $69,000 in benefits she had already received.
“Do you accept, Ms van Eeden, that this letter would have caused considerable distress to the insured?” asked Ms Orr.
“Absolutely,” was the reply.
Prior to sending the letter, the company psychiatrist reviewed the reports and concluded that although she may have problems working as a nurse she would be able to work in some less demanding profession. The claim was then sent to a review committee, which included the case manager, and found the woman was not deserving of receiving payments.
At one point TAL demanded that the woman complete a daily diary of her activities to maintain her payments despite a symptom of her mental illness being short-term memory loss.
Her diary contained multiple references to anxiety about TAL and the demands of filling it in. It also made references to self-harm.
Ms van Eeden will continue giving evidence on Friday morning.