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Diagnosis during delay

Catarina was diagnosed with a rare autoimmune disease in early 2020. Catarina decided it was a good time to ask her insurance adviser to arrange life and health cover, though she understood an insurer would likely want to exclude her condition.

The adviser spent a month trying to arrange cover for Catarina, but couldn’t find an insurer willing to cover Catarina, even with her condition excluded, because there were so many potential complications associated with her condition.

The adviser scheduled a meeting with Catarina to let her know the bad news, but then had to cancel it due to personal circumstances. The adviser didn’t reschedule the meeting, and it was another couple of weeks before he confirmed to Catarina by email that he couldn’t get cover for her.

Sadly, during that time Catarina was diagnosed with cancer. Catarina felt she lost the opportunity to find alternative cover due to the adviser’s delay in letting her know he couldn’t get cover.

Neither party knew how to resolve the situation, and Catarina came to FSCL for help.



Catarina thought the adviser had been negligent in not confirming the bad news sooner.

The adviser said his usual practice was to tell clients when he couldn’t get cover for them in a face to face meeting, because it was easier to explain and discuss the reasons why, rather than them being left disappointed and angry with an email. The adviser felt terrible about Catarina’s situation, but didn’t think he had been negligent.



We talked to Catarina and the adviser about how the complaint could be resolved. The adviser was keen to settle it early on, as he knew it was in Catarina’s interests for it not to be dragged out.

Catarina and the adviser agreed compensation for direct loss was not appropriate, because Catarina would need to show:

  • she could have got cover if she had the opportunity, and
  • that her claim would be accepted. However, Catarina was already suffering from cancer symptoms at the time the adviser was seeking insurance, so it’s likely any claim would have been excluded even if she had found cover.

The adviser offered Catarina $2,000 compensation on the basis he did not admit liability or fault.

We told Catarina this was a very reasonable offer because FSCL’s maximum compensation for stress and inconvenience was $2,000, and there was no guarantee we would award that amount of compensation if we did proceed to a full investigation and formal decision.



Catarina accepted the adviser’s offer and was pleased to put the matter behind her.


Insight for participants

It’s important to communicate with your clients to make sure they are fully informed of matters they need to know about, at the earliest possible opportunity.

When a complaint arises, it’s often in everyone’s interests to resolve it with an early settlement if possible.