An insurer’s interpretation of its policy did not align with medical evidence when it refused to pay a crisis recovery benefit, the financial services ombudsman has ruled.

AIA's decision did not “reflect a fair or reasonable application of the policy terms”, the Australian Financial Complaints Authority says, determining the insured met her life policy’s definition of a stroke.

The woman was hospitalised on June 5 2024 and diagnosed with an acute stroke. On June 15 she was readmitted with continued symptoms.

In assessing her claim, AIA obtained medical opinions and found she had suffered a stroke but did not meet the policy’s definition of stroke.

It said at the first hospital admission there were no objective neurological signs lasting more than 24 hours, and imaging during the second admission did not confirm a further stroke, so the policy criteria were not met.

An AFCA ombudsman says AIA is correct that the policy’s requirement for the acute onset of objective neurological signs imposes a more stringent evidentiary standard.  

“Unlike subjective symptoms, which rely on the complainant’s account, I agree that objective signs must be observable and clinically verifiable.”

It says the distinction is critical because the policy states there must be demonstrable neurological impairment that can be assessed independently. 

However, the policy does not specify how objective symptoms must be recorded or measured. Symptoms such as dizziness and altered sensation, when independently observed and documented, can constitute objective neurological signs.

The complainant’s symptoms were documented by treating clinicians during her second hospital admission. Her treating neurologist and her GP provided written reports confirming the stroke diagnosis, supported by MRI imaging and hospital records.

“On balance, the medical evidence supports objective and ongoing neurological signs lasting more than 24 hours, and imaging shows a cerebral infarct consistent with a stroke,” AFCA said.

Read the ruling here.