Once again, in considering a trauma policy, the Australian Financial Complaints Authority (AFCA) has demonstrated that it is not constrained by the terms of the actual policy in its pursuit of fairness for the consumers of insurance products.

It follows that insurers seeking to argue in defence of a declined trauma claim based on the failure to meet a policy definition before AFCA must do more than simply argue the law of Larwint_[1] and O’Neill_[2].

Rather (and obviously this is easier said than done), the argument must also show that it was always understood between the parties that the policy would not respond to this medical scenario and further that such a position is inherently fair in the context of the trauma policy as a whole.

FACTS OF THE CASE

The claimant held trauma cover with the life insurer. He suffered a mass in his testicle which was feared to be malignant.

A definitive diagnosis of cancer before surgery was impossible for medical reasons, and on expert medical advice the testicle was removed.

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