Insurer attitudes towards mental health issues are not always enlightened - as the number of Financial Ombudsman Service complaints shows - but there are signs of greater understanding and that includes employees too
Mental illness may no longer be the taboo subject it once was, with each week seeing another celebrity coming clean about their mental health battles, or making a plea for greater awareness and empathy.
But while the public as a whole may be starting to understand that a stiff upper lip can mask inner torment, insurance remains a difficult terrain to navigate where the line between valid risk assessment and discrimination is not always clear.
Anecdotally, stories of people with mental health conditions facing blanket exclusions, or finding their claim declined because of factors seemingly unconnected to the risk, still persist, but as financial services as a whole comes under increasing pressure from regulators to treat customers fairly, does the reality bear this out?
There are well defined rules on when insurers can offer differential treatment to people with mental health conditions. According to the UK Equality and Human Rights Commission, insurers must objectively justify charging a higher premium, providing reduced cover, or refusing altogether to insure someone with a protected characteristic, which includes mental health conditions.
Insurers must show that any decision to treat differently is based on a source on which it is 'reasonable to rely' and that it is valid to treat the person differently because they have a different risk profile. Relying on assumptions, stereotypes and generalisations can constitute unlawful discrimination.
Complaints data that relates specifically to customers with mental health conditions is hard to come by. The Financial Ombudsman Service, for instance, does not record complaints regarding discrimination on the basis of mental disability, separately from physical disability.
According to the Equality Act (2010) someone has a disability if they have a mental or physical impairment that has a substantial, adverse and long term effect on normal day-to-day activities.
An individual does not need to be suffering from a disability currently as the protection of the act extends to discrimination on the basis of a previous mental health condition.
Mental health problems that may be covered under the Equality Act include:
• Bipolar affective disorder
In the 2014-2015 financial year, the FOS took formal action on 59 insurance complaints where the complainant was listed as vulnerable or disabled, of which 42.6% were upheld. In the 2015-2016 year to date the number of complaints was only 50, but 61.67% were upheld.
However, a spokeswoman from the FOS noted that even within these, the fact the customer is listed as having a disability may bear no relation to the nature complaint itself, as the FOS records disability stats to help ensure it is dealing with cases in the way that works best for each customer and can make adjustments if necessary.
But she did tell Post that the body continued to observe cases where the service provided by insurers fell short of what was expected. "Many of the people we speak to find financial services hard to understand or challenging to deal with. So, imagine how difficult it can be if you're experiencing mental health difficulties, have a disability, or your personal situation means you need specific help," she says.
"While it's encouraging that some banks and insurance companies have made a commitment to tackling these problems, too many of the complaints we see could have been avoided without the need for the ombudsman to sort things out."
For those with mental health conditions, disclosure remains a particular concern. Many mental health charities note the difficult challenge presented by pre-cover questionnaires, as people fear that disclosing a history of mental ill health could see their premiums skyrocket, or blanket exclusions applied, but failing to disclose it could lead the insurer to decline a claim in the future, leaving people in an even more vulnerable situation.
In one complaint upheld by the FOS in 2015, an insurer refused to pay the claim of a man who was hospitalised with psychosis while on holiday in Spain, because he had a history of depression, despite the fact that the diagnosing doctor made no mention of depression and linked the psychosis to his recent divorce and other life events.
His GP also noted the customer had never had a psychotic episode previously, however, the insurer chose to follow its own medical advisers, who said althought depression and psychosis were "completely different" they could be linked, so there were grounds to regard it as a pre-existing condition.
In this case, the FOS found that the onus was on the insurer to prove that the psychotic episode was linked to his depression, rather than on the claimant to prove it was not and ordered the insurer to pay the claim. However, it is not known how many similar cases go uncontested in cases where vulnerable individuals lack the support necessary to fight an insurer's decision.
The company in this case may have been acting in good faith but it raises the question of whether staff in underwriting offices, and claims teams are adequately trained to deal with situations where understanding the nuances of individual cases is needed, rather than relying on broad proxies.
Fear of embarrassment
Sophie Timms, head of UK public affairs and corporate responsibility at Zurich, says the insurer is aware that customers with mental health conditions can be "reluctant to share information for fear of embarrassment" but says it encourages people to be "open and honest at the outset and share as much information about as possible about their needs, so we can help ensure customer claims, particularly from vulnerable customers, are paid as smoothly as possible".
With any condition, whether physical or mental, providing all relevant information has been disclosed in the underwriting process then a claim which meets its terms and conditions will be paid, she adds.
One area where claims will always be rejected is in the case of suicide within the first 12 months of a policy, however, in general claims will not be rejected because of a mental health condition.
In fact Zurich's figures show that nearly one-third of new income protection claims (29%) during 2015 were for mental illness including stress and anxiety, representing a jump of over 10% on the same previous year, Timms says.
Looking specifically at travel insurance, PJ Hayman runs Free Spirit travel, a scheme that specialises in insuring people with pre-existing medical conditions.
Director Peter Hayman says: "The major challenge for people with mental health issues looking to take out travel insurance is that they are going to have to declare their condition and pretty much all travel insurance will have some sort of exclusion in relation to psychiatric conditions that have been previously diagnosed. Quite often people don't declare them. Sometimes they, or their family members, are in denial. So there will tend to be a higher declinature rate with these kind of claims than with other conditions."
He continues: ""Most insurers that medically screen people will be using an industry standard system, which has got a fairly rigid question set. When you get to the higher end of psychiatric conditions, like bipolar or schizophrenia, that question set is inadequate for the job.
"At the lower end, with anxiety or depression, it is very arbitrary. You can answer one question differently and suddenly your premium will shoot up or you might not even be offered cover. One of the most obvious things is 'have you ever had to cancel a trip before due to your condition?'. If so, then a lot of schemes won't provide you with the cover.
"Somebody who is on medication, it's controlled and hasn't had any recent episodes is probably going to get cover easily. It's when you get a breakdown in that and people having regular referrals and their medication changed – in other words a degree of instability – that the insurance will ramp up accordingly. There's a major difficulty in trying to assess people with mental health issues.
"Such a lot of business is done online now, so you are effectively relying on that person to self-assess. You really need to be speaking to someone who is trained because, as the questions are so black and white, you need to ask around those questions to get a better idea of what that person is trying to tell you. Running through a standard question set, there is a danger that people will not declare their conditions."
In January this year, the Association of British Insurers and the British Insurance Brokers Association jointly launched their industry code of practice for vulnerable customers, designed to ensure that those with a range of vulnerabilities, including mental ill health, receive assistance to ensure they can achieve the most favourable option when it comes time to renew their home and motor policies.
Vulnerable customer's code
A voluntary good practice pledge made jointly by members of the Association of British Insurers and the British Insurance Brokers' Assocation launched in January 2016.
Applies to customers with range of vulnerabilities, including, but not limited to, physical disability, severe or long-term illness, mental health issues and people with low literacy, numeracy or financial capability skills.
Designed to ensure staff are adequately trained to recognise and understand potentially vulnerable customers at renewal and be able to offer flexible options to help address needs.
Member institutions have 12 months to implement the code and report will then be compiled by Biba and the ABI to assess its impact.
Discussing the rationale behind the code, Graeme Trudgill, executive director at Biba, said it recognised that "some customers may be less able than others to make informed decisions about their choices at renewal".
"The code calls on firms to train employees to identify customers who may be having difficulty identifying their options and to help them appropriately and to clearly set out their options at renewal. More than 500 Biba members have already reviewed the code on our website and this builds on what brokers already do to identify demands and needs," He says.
Trudgill continues: "In addition, the find-a-broker service helps more than a quarter of a million customers seek the insurance protection they need. Some of our members can also provide travel insurance specifically designed for customers that have a mental illness and can arrange suitable cover for them often including their condition."
James Bridge, head of conduct regulation at the Association of British Insurers, says while the code seeks to capture a number of vulnerabilities, customers with a mental illness will hopefully be key beneficiaries of the effort: "The new ABI and Biba code of practice to help brokers and insurers recognise and support potentially vulnerable customers at renewal, launched at the start of this year, makes explicit mention of mental health problems as one of the risk factors the sector needs to be aware of."
He continues: "Insurers and their associates are also encouraged to consider the impact of bereavement or divorce on customers. The sector is showing a clear commitment to considering how it can best communicate with vulnerable customers, and educating staff about warning signs to watch out for."
Role of the employer
While the insurer's role as a financial service provider has received significant scrutiny, its role as an employer has attracted less attention but like all UK companies, the Equalities Act applies not just to potential customers but also employees.
In this area a lot of emphasis has traditionally been placed on companies not discriminating during the applications process and making reasonable adjustments for those who disclose a disability when they apply for a role. But how much support is in place for those who undergo a mental health crisis while already employed?
At Zurich, the insurer is mindful that staff members who join with a clean bill of health could still experience mental illness at some point during their time of employment. Timms says: "As an employer we're very aware that every one of us could be termed ‘vulnerable' at various points throughout our lives, which could include experiencing mental health conditions, and are committed to creating an environment where employees are aware of their and other's health and wellbeing.
"Our UK Wellbeing programme promotes initiatives that support our people's physical and mental health, such as offering workshops and webinars, some of which have been developed in conjunction with Mind, aimed at improving awareness, understanding and mind set changes to ensure we treat employees as individuals and help us watch out for warning signs."
A spokeswoman for LV said the insurer offered employees access to a free confidential advice service funded by the company. "Employees can confidentially call a qualified professional to discuss a range of topics including emotional and health problems, anxiety and depression, managing stress, phobias, and traumas," she says.
"It also covers other issues such as legal advice and consumer rights. This service is available 24 hours a day, 365 days a year and provides employees with telephone advice and counselling, and - where needed - face to face counselling," she said.
Lyn Nicholls, HR director for Ageas, adds: "There is a free employee assistance helpline available to everyone, as well as relevant literature from experts such as our 2016 employee-nominated charity of the year Mind. Having policies that relate to mental health and wellbeing is also extremely important to us and we have a ‘finding the balance' policy for all our people, supported by training for all managers and HR teams which we have rolled out across the company over the past two years and delivered by Mind.
"Ageas is involved, alongside relevant charities, in research activities to help protect our vulnerable customers and bespoke training is provided to customer-facing employees."
While growing awareness of the needs of their own staff will hopefully see the number of firms offering such services increase greatly in the years to come, it is in their role as service providers that insurers must be particularly careful to ensure they are doing the right thing, both as an ethical imperative but also as a regulatory one.
Mental health charity Rethink Mental Illness says insurers can improve the service they provide by making sure they follow the guidance and rules from regulators already in place, which demand that customers with mental health conditions, like all others, are treated fairly.
A spokeswoman says: "A key thing is to make sure they do not discriminate against people with mental illness, or make assumptions without taking personal circumstances into account. Insurers should also give information about how to complain, deal with claims quickly and fairly, and try to make sure that people only buy a policy that they can claim under."
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