Medical records no silver bullet for disclosure

The insurer has been in the spotlight after a media investigation into a declined claim.

The man involved tried to claim on his income protection policy but it was declined and voided because he had not disclosed  sleep apnoea, high blood pressure and high cholesterol readings, meant Shane would not have been accepted for insurance in the first place.

The claimant suggested that the issue could be avoided if insurers looked at all applicants medical records.

Ballantyne said it would remove the non-disclosure risk -provided the client disclosed all their medical providers.

But she said it would create other issues. Insurer costs would increase not just for obtaining the medical information but for the cost of the personnel required to work through them.

"The onus would be on the insurer to go through the client history."

She said a large part of existing delays in processing applications was waiting for medical records. They were used in about half the applications.

If every client were submitting them it would make the process even longer, which would increase the number who dropped out before a policy was issued, meaning wasted cost for the insurer and a lost opportunity for advisers.

Adviser Katrina Church said she would use ACC history to help spark clients' memories about their pre-existing health conditions. If there were concerns that things had been missed, she would get the client to get their medical history and work through it with them.

She said many clients would not be comfortable with the idea of insurers having wholesale access to their medical records.

Commentator Russell Hutchinson, of Chatswood Consulting, said a big data solution to underwriting was coming, but probably not in the next two or three years.

"I think we’re looking at a reform which cannot rely on such a change, but should not prevent it, at best, perhaps, it might facilitate it by making it clear insurers are at least entitled to use all medical records."

Ballantyne said 4% of Partners Life claims were declined because of non-disclosure.