A plaintiff who argued it was her financial adviser who failed to disclose her history of weight loss procedures has lost an attempt to overturn her insurer’s decision to avoid her coverage due to fraudulent misrepresentation.
The Australian Financial Complaints Authority (AFCA) states in its decision on the dispute that the adviser’s recklessness is attributed to the complainant under the Agency Act.
“This means that the advisor’s misrepresentation is the complainant’s misrepresentation, and the complainant is responsible for the information provided on the insurance application form by the advisor,” the AFCA’s decision reads.
The dispute arose after the complainant made a claim in March 2018 on her Total and Permanent Disability (TPD) policy as she suffered from generalized anxiety disorder, pain disorders and depression.
She had acquired life, income protection (IP) and DPT coverage through her pension fund in April 2013 through her financial advisor by completing an online application and answering some questions.
MLC avoided her coverage after she applied in 2018 for fraudulently misrepresenting her medical history in her application form.
The insurer claims that the false statements made in the plaintiff’s insurance form were made recklessly, without caring whether the answers were true or false.
One of the medical questions specifically asked if she had undergone surgery to reduce her weight in the past five years and the answer “No” was provided although the opposite was true.
The MLC claims that if the question had been answered correctly, it would not have provided IP or PDT coverage because the Complainant had gastric banding surgery in the 12 months prior to her application.
It would have provided life cover, but this would be subject to a 50% charge.
The AFCA decision says the complainant has a “significant” history of gastric banding procedures, including one in October 2012, less than a year before she applied for coverage through her counselor.
“The panel was satisfied that the question was unambiguous, it was a clear and direct question,” the AFCA’s decision reads.
“While the committee accepts the complainant’s claim that she did not complete the form and that the adviser may not have asked questions, the legal position regarding the agency is quite clear.
“The committee was satisfied that the adviser was acting as an agent of the plaintiff, so his actions should be considered actions of the plaintiff.”
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