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TAL ordered to reverse claim denial over cocaine use 

Life insurer TAL has lost a claim dispute over undisclosed cocaine use after it relied on evidence from a GP who supplied contradictory reports. 

The Australian Financial Complaints Authority says the doctor caused “confusion, difficulty and disputation”. 

“The insurer’s case turns entirely on one of the accounts given by a GP,” the authority’s adjudicator said. “However, that account is unreliable – it is contradicted by other accounts given by the same GP and the GP says the account was based on speculation. 

“I sympathise with the insurer for the difficulties that has caused in its investigation of the claim. I am left with the impression there is a real possibility the complainant used cocaine occasionally before the policies started. However, there is no reliable evidence about how frequently or when he used cocaine.” 

The TAL customer held life and income protection policies, incepted in 2014 when he was 37. With the help of his financial adviser, he completed an electronic application form and a personal statement, answering ‘no’ when asked: “Have you used any recreational drugs?”  

In June 2022, he made a claim for the crisis benefit under his IP policy after a March 2021 heart attack. Hospital records stated the diagnosis was “in context of cocaine and smoking”. The medical notes also said “cocaine – few grams a year”. 

TAL denied the claim and avoided (cancelled from inception) the man’s policies, saying he fraudulently failed to disclose his history of cocaine use.  

The policyholder admitted using cocaine after the policies began but denied having used it beforehand, saying he was drug tested on a regular basis while working on mine sites. 

AFCA notes the policies were on foot for nine years and could only be avoided for fraud. 

“The complainant reasonably expects the insurer only to avoid his policies if it has solid evidence supporting that,” it said. 

“I am comfortably satisfied the complainant used cocaine in the period before his heart attack. However, that does not show that the complainant had used cocaine before the policies. There are no contemporaneous medical records, or any other contemporaneous records, from before the policies started which record cocaine use.” 

Notes from the complainant’s GP of more than two decades – referred to as Dr GM – state he was advised against cocaine use two weeks after the heart attack. 

In mid 2022, Dr GM said his patient “has had very casual contact with cocaine since his mid-30s while socialising at a local football club. Use was limited to several times per year at most.” 

But that September, Dr GM contradicted that, stating the man’s first use of cocaine was about the age of 18. “His use is opportunistic, probably several times per year. He is usually with his football mates on the occasional Friday night. Our conversations have been only in recent times to clarify the misreporting by the hospital doctor regarding the frequency and quantity of his cocaine use,” that report said.  

In November 2022, the GP said the claimant had “no history of any drug misuse in his medical notes currently or pre-dating May 13 2014”, and his cocaine use was “incorrectly recorded in his hospital notes.” 

Last year, the doctor wrote that the claimant was “the victim of misrecorded medical information”. 

“There is no history of cocaine abuse, or evidence or behaviour suggestive of cocaine use or abuse in [his] medical records,” the notes said. “He has never been told to stop using cocaine as it had not been an issue. There is no record of significant cocaine use because there is no history of significant cocaine use.” 

The doctor later stated: “Where I wrote [he] had used cocaine since the age of 18, that was speculation on my part. I have no evidence of [his] drug use, apart from knowing the misrecording of it in the hospital notes/discharge summary on the occasion of his myocardial infarction. My statement was to more normalise any use of cocaine [he] may have had. I repeat, it was speculation only.” 

AFCA’s ombudsman says the GP “tried to distance himself from the contents of his [September 2022] report” and his final statement “is extraordinary” because there was nothing suggesting the original notes were “anything other than the facts as Dr GM understood them”. 

The authority says the insurer is not entitled to avoid the policies and must instead complete its assessment of the man’s claim. 

See the ruling here.