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“A traumatic trauma claim”

In 2003, Jeremy, a financial adviser, arranged trauma insurance for Hans. There were exclusions placed on the policy, including for Hans’s hearing condition he had suffered since childhood.

In 2010, Hans was diagnosed with an acoustic neuroma, a type of benign brain tumour. Hans said he told Jeremy about his AN several times, that it affected his hearing, and surgery was inevitable. Hans said he asked Jeremy to look into whether he could make a claim under his trauma policy. Jeremy said a claim would be excluded because of the existing hearing exclusion on Hans’s policy.

Hans said he spoke with Jeremy again several times over the following years about the AN, but Jeremy continued to say that a claim would not be paid. 

In 2013, Hans’s AN had worsened, however due to the risks of surgery and the fact Jeremy had said there would be no trauma claim payable, Hans decided against surgery.

In 2014, Hans suffered a series of strokes and said he spoke with Jeremy about claiming for these, however Jeremy did not assist with making a claim.

At this stage, Hans said that Jeremy ‘fired’ him as a client. Hans’s wife talked to her adviser about making a claim for Hans’s strokes, but the claim was declined. Hans then spoke to Jeremy again and submitted a claim for the strokes. This resulted in Hans receiving the full trauma benefit under his policy ($238,000) in late 2015. It was also discovered that there was cover under Hans’s policy for a benign brain tumour. However, because the full trauma benefit had been paid, the insurer said there was no benefit available for the AN claim.


Hans’s complaint

Hans said Jeremy had failed to:

  • attempt to remove the hearing exclusion
  • enquire with the insurer whether there was cover for his AN or let the insurer decide whether there may be a payable claim
  • research the nature of Hans’s AN
  • advise Hans adequately at the time the policy was taken out about reinstatement options following a claim. Hans said that if Jeremy had provided better advice he would have taken out a policy that would have reinstated following the stroke claim (meaning he would have been able to claim for the strokes and the AN).

To resolve his complaint, Hans wanted Jeremy to pay him what he considered he could have claimed for his AN ($50,000), and an amount for lost benefits because his policy did not reinstate following the stroke claim.

When Jeremy declined to pay compensation, Hans complained to FSCL.


Jeremy’s view

Jeremy said that although Hans had mentioned the AN from 2013 onwards, Hans did not actually describe it as a ‘brain tumour’. Jeremy thought the AN was related to Hans’s existing hearing condition and that the policy’s hearing exclusion would exclude any claim.

In any event, Jeremy said Hans had not suffered a financial loss because he had received the full trauma benefit under the policy. Even if a claim had been submitted for the AN earlier and a payment made, the amount paid for the stroke claim would have been reduced by the amount paid for the AN claim.

In addition, Jeremy said he met with Hans in 2013 about reviewing his policies. An application was made to a new insurer, which said there would be an exclusion in relation to Hans’s hearing condition, and the AN.



Following our full review of the file we issued an initial view that the complaint should be discontinued. In our decision we said that:

  • It was unlikely the hearing exclusion would have been removed by Hans’s insurer, based on the proposed new insurer’s response.
  • It appeared the relationship between Jeremy and Hans had broken down by the time Hans and his wife sought advice from another adviser, and then worsened from there.
  • In balancing all the evidence, we considered it was likely Hans only told Jeremy that he actually had a brain tumour, in December 2015. We did not consider it reasonable to expect Jeremy to research what the AN was or whether a claim could be paid for it prior to this.
  • Following the submission of the AN claim, there was evidence on the insurer’s file that the nature of Hans’s AN may not have actually met the policy requirements for a trauma claim to be paid.
  • Jeremy’s advice about the policy was provided in 2003, prior to FSCL’s jurisdictional date of 1 April 2010. This meant we could not investigate whether Jeremy could have provided Hans with better advice at policy placement.

Further negotiations and agreement reached

Hans was not happy with our decision and remained strongly of the view that if he had received better advice at the time of policy placement, and better service after he told Jeremy about the AN, he would have been able to receive greater benefits.

We met with Hans and his lawyer, and Jeremy and his lawyer, separately at our offices. Following this we assisted the parties to reach a negotiated agreement to resolve the complaint. Jeremy considered there was merit to engaging in negotiations to try and bring the complaint towards a resolution. The parties agreed that Jeremy would pay Hans $30,000 in full and final settlement of his complaint and provide an apology.

This outcome was loosely based on the parties’ desire to bring the dispute to a final conclusion, a contribution towards Hans’s legal fees, and discussion around whether Jeremy could have provided Hans with more assistance when he was told about Hans having an AN, including enquiring further into what the condition was.