Resolution Life Australasia must reassess a melanoma patient’s trauma claim after a dispute ruling found that it carried out a “deficient” investigation into whether the man’s illness met terms covered by its policy. 

The Australian Financial Complaints Authority (AFCA) criticised the insurer’s decision not to consult the claimant’s treating doctor, who had filled out the medical certificate that confirmed the man’s diagnosis.

Resolution Life instead relied on observations from its in-house doctors, both of whom recommended that the melanoma did not meet the policy’s definition of cancer to be covered.  

The policy pays benefits for a diagnosed melanoma if it is Clark Level 3 or higher, is more than 1mm thick, or if there is a history of ulceration.  

However, the authority said the doctors’ examinations were given in a “brief and fairly informal manner” and that it is “unusual” for an insurer to utilise in-house experts.  

“It is unusual for officers of a party to a dispute to give expert opinions in that party’s own case,” the authority said.  

“Experts are typically expected to have a greater degree of independence from the parties.” 

AFCA says as a result it could only give “limited weight” to the doctors’ opinions. 

“I am left with doubt about whether the complainant meets the requirements of the policy or not,” the ombudsman said.  

The complainant had provided a referral letter from his doctor to a plastic surgeon that highlighted a 9mm “melanoma in situ” on the patient’s nose. But the authority said this material did not establish whether the melanoma had met the terms in the policy.  

AFCA says it is fair for the insurer to reinvestigate the claim, noting that it was “at least possible that the melanoma was at least 1mm thick”.   

The decision requires Resolution Life to communicate with the treating doctors to ask if the melanoma had met any of the three requirements to be classified under the policy cancer benefit.   

“The complainant cannot, at this stage, reasonably expect to be paid the benefit, because the medical evidence does not show his melanoma meets the definition in the policy,” the authority said.  

“However, he can reasonably expect the insurer to ask his treating doctors the relevant questions, rather than proceeding on the informal opinions of its in-house doctors.”  

AFCA notes that in two previous determinations it has addressed failures by Resolution Life to consult with treating doctors. 

“The case assessment in this case was before both these determinations,” it says. 

“Still, it is another example of the insurer preferring to have cases assessed by its own in-house experts rather than asking treating doctors their opinion on the relevant questions.” 

Click here for the ruling.