The Life Insurance Code of Practice (the Code) presents a guide for obtaining targeted and effective surveillance evidence in appropriate cases.
When Surveillance can be conducted
Paragraph 8.12 of the Code prescribes various obligations concerning insurers’ use of surveillance including when, and how, it can be conducted, and when surveillance must cease. That paragraph provides the following preliminary requirements that life insurers must consider, and address, before proceeding to engage a surveillance operative:
- Alternative methods of verifying information will be sought prior to arranging surveillance;
- Surveillance will only be arranged where [the insurer] reasonably believe[s] prior to carrying out the surveillance that [the] claim appears to be inconsistent with information available to [the insurer], and [its] reasons for this will be documented;
- Requests for surveillance must be internally reviewed and approved by a senior claims manager.
This aspect of the Code is aimed at preventing surveillance being deployed as a matter of routine, in the absence of a reasonably clear basis. In effect, these provisions reflect what should already be best practice so that, when assessing “suspicious” claims, surveillance is targeted towards specific inconsistencies which have been indicated in information before the insurer, for instance in relation to a claimant’s purported functional capacity. This might be indicated in considering evidence from different sources such as factual investigations, contrasting medical histories reported by doctors, or in other material obtained, or provided to, the insurer in the course of assessing the claim.
Provision 8.12(b) is expressed in terms of the subjective satisfaction of the insurer (similar to the language used in most TPD definitions).
Importantly, any inconsistency in the information that might warrant the deployment of surveillance must be clearly identified and documented by the insurer (as paragraph 8.12(b) also requires). This process should not only avoid criticism of an insurer’s decision to initiate surveillance but also, we anticipate, lead to more focussed and purposeful use of surveillance generally.
How surveillance is to be conducted
The manner and location in which surveillance can be appropriately conducted is also limited under provision 8.12 providing that:
- surveillance will not be conducted in any court or other judicial facility, in any medical or health facility, in any bathroom, change room, lactation room or inside your house;
- our investigator will not intentionally film people in the company of the subject of the enquiry, and where this cannot be avoided, any footage of people in the company of the subject of the enquiry will be pixelated or blurred before being provided by us to any external party such as a court or external dispute resolution body;
- surveillance investigators will not communicate with neighbours or work colleagues in ways which might directly or indirectly reveal that surveillance is being, will be or has been conducted.
These provisions are straightforward and require a clear understanding by operatives as to the appropriate parameters by which surveillance must be conducted. Many insurers have service standards with investigators where these parameters could be specified. We suggest that any pre-existing service standards be reviewed to ensure compliance with the Code and that service providers provide confirmation to insurers that their operatives have been duly informed of them.
Ideally, instructions to surveillance operatives should specifically set out the relevant obligations under provision 8.12 the Code, as well as the particular inconsistencies which led to the insurer’s election to undertake a period of surveillance. In many cases, the identification of inconsistencies will also provide a useful background for experienced operatives to target surveillance productively in terms of timing, location and other strategic considerations.
The Code does not prohibit footage of individuals other than the claimant, but it does require images of individuals other than the claimant to be pixilated or blurred. This allows for footage of claimants’ interactions in social or other public settings which may be relevant to their claimed restrictions or symptomology, provided those other persons are not identifiable.
When surveillance must cease
Provision 8.12(f) of the Code requires that surveillance must cease where there is evidence from an independent medical examiner that the use of surveillance is negatively impacting the claimant’s recovery. In practice, this requirement would only seem relevant in circumstances where a period of surveillance has been conducted (or attempted) and revealed to a claimant, for instance if an operative is ‘outed’, or if surveillance is otherwise disclosed such as in the course of affording procedural fairness.
Another point to note is that the Code refers to an independent medical examiner, rather than a treating doctor or other practitioner.
Further, as the reference is to the ‘discontinuation’ of surveillance, a ‘pre-emptive’ opinion by an independent medical examiner (for instance instructed on behalf of a claimant when lodging the claim) that surveillance would negatively impact recovery would not operate to prevent an insurer from initiating surveillance. Only when the carrying out of surveillance has been revealed to a claimant could an independent medical examiner be in a position to say whether or not it could be impacting their recovery and should be discontinued.
While the provisions of paragraph 8.12 of the Code will regulate the way insurers go about obtaining surveillance, they should not be viewed as prohibiting investigations where genuine concerns arise regarding the credibility of claimants and the corresponding validity of their claims.
The emphasis on identifying and seeking to verify inconsistencies in evidence prior to instructing surveillance will likely result in more targeted and purposeful surveillance and it should avoid unwarranted or routine deployment.
The introduction of the Code is a good opportunity for life insurers to reflect on how they instruct investigators. It should ensure that appointed investigators are aware of specific obligations and limitations in conducting surveillance and are provided with relevant information which discloses the bases on which the instructions are warranted and factual aspects of particular interest to claims assessors are targeted.
The article was written by Andrew Gawthorne, Associate, Matthew Harding, Partner and Jason Stevens, Partner.