Breast cancer surgery wasn't 'radical' enough for CommInsure
CommInsure refused to pay out a woman with breast cancer because it didn't consider she'd had "radical" breast surgery, despite the evidence of her doctor and surgeon.
The financial services royal commission on Thursday heard that CommInsure repeatedly denied her claim on the basis of an outdated and arbitrary definition of "radical" breast surgery, which it argued only included a mastectomy, despite that definition not appearing anywhere in the policy documents.
The woman bought trauma insurance in 1996 and was diagnosed with "carcinoma in situ", a form of breast cancer, after a mammogram in March 2016. She was treated with breast-conserving surgery as well as radiotherapy - a combination of treatment now often used as an alternative to a complete mastectomy.
After the woman's claim was originally rejected, the woman's treating doctors, including her surgeon and radiation oncologist, provided evidence stating that she had had radical surgery.
"The treatment received is radical because radiotherapy was required as an alternative to mastectomy," the surgeon wrote.
At the time of her claim, CommInsure had not updated its definition of policy definition of breast cancer since 1998, the royal commission heard, which meant it had not kept up with advances in treatment, senior counsel assisting the commissin, Rowena Orr QC, suggested.
CommInsure later updated its definition in May 2017 to allow payouts for treatment of carcinoma in situ that were treated with surgery and radiotherapy. But it did not backdate the change, meaning the woman was still excluded from a payout.
"Do you think that the way CommInsure handled the claim fell short of the standards the community would expect?" Ms Orr asked.
"Yes, I do," Ms Troup agreed.
After the failure of a conciliation process, in which CommInsure offered to pay half of what the woman was entitled to, the woman took her case to the Financial Ombudsman Service (FOS).
"CommInsure knew, didn't it, that it was problematic to decline a claim based on an interpretation of the term 'radical breast surgery' that didn't appear anywhere in the policy documents?" Ms Orr asked.
"Yes," Ms Troup agreed.
FOS sided with the woman, deciding CommInsure was not entitled to reject the claim. It then flagged concerns that CommInsure's treatment of "radical breast surgery" was a "systemic" issue, which CommInsure disgreed with, arguing it was just an "isolated event".
Under questioning from Ms Orr, Ms Troup refused to agree to a review of claims it had rejected based on its definition of "radical breast surgery".
Ms Troup said it was "something that's on my mind having prepared for today" but she wanted to discuss it with "the business".
"But you're not prepared to make a commitment that that will happen?" Ms Orr asked. "Not today, no," Ms Troup said.
Insurance is the focus of the sixth round of hearings at the Hayne royal commission into banking, super and the financial services industry, which started on Monday.
The hearing continues.
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