Insurers told to halt delay

By ROB STOCK - Sunday Star Times | Sunday, 16 December 2007

Insurers should not kick difficult cases into touch by delaying quotes indefinitely, new guidelines on insurance from the Human Rights Commission will demand when they are released tomorrow.

The new guidelines, which also reconfirm the voluntary moratorium by insurers on genetic testing, tell insurers they have up to six months to make a quote in all but the most extreme cases.

The commission received complaints from people caught in insurance limbo and unable to get a mortgage.

Under the Human Rights Act 1993, insurers cannot refuse to insure people, so have no choice but to try and price the risk of insuring someone, which can be hard in exceptional medical circumstances.

But that should not be an excuse for effectively turning down someone for insurance by simply putting their case on hold indefinitely, the commission believes.

One situation handled by the commission was the case of "Lucy", a transsexual woman who was told her case had been deferred by a year by an insurer because she fell outside the company's underwriting guidelines. The insurer insured her once the commission became involved.

The guidelines do not have the power of law but are the commission's views on how the Human Rights Act should be interpreted in relation to insurance.

They are considered important because few disputes get to court and are settled with the settlements kept secret with non-disclosure agreements.