Sometime after the cessation of her employment with her employer, the applicant became entitled to payment of a lump sum benefit as a result of her total and permanent disablement as defined under the policy.

The TPD benefits were paid to her on 21 January 2015. The issue in dispute in this case was whether the timing of the TPB benefit paid to the super member was reasonable.

The applicant submitted that it was unreasonable for the insurer to have withheld payment once it had received all the materials necessary to assess her TPD claim under the policy and once a reasonable time for it to review and determine her claim had expired.

In her submission, she stated that it was unreasonable for Hannover to have withheld payment from 21 December 2012. This date was 10 business days after it received her completed application and relevant medical evidence certifying her as TPD under the policy.

She therefore claimed interest on the TPD benefit from 21 December 2012 up to 21 January 2015, which was when the payment was finally made to her.

On 13 April 2015, the applicant’s solicitors wrote to the respondent claiming interest pursuant to section 57 of the Insurance Contracts Act on her TPD benefit of $386,800 from 20 December 2012.

On 25 May 2015, the trustee wrote to her solicitors advising that the insurer had denied her claim for interest. She then commenced proceedings against the insurer.

The applicant submitted that given she had provided various medical reports from doctors to the insurance company which expressly certified her as TPD, there was no need for Hannover, the insurer, to undertake further medical inquiries.

She also noted that a period of 10 business days was a reasonable window for the insurer to investigate and determine her claim given that clause 8.15 of the Life Insurance Code of Practice “provides 10 business days as the maximum time period for an insurer to notify an applicant of a decision regarding a claim”.

While the code was not yet implemented in December 2012, the Code of Practice was subsequently adopted by Hannover and therefore it ought to have determined her claim within that time frame.

In its defence, the insurer stated that there was no standard reasonable period in which to pay a claim and that every case will turn on its facts and it was not unreasonable for it to act as it did in the particular circumstances of this case.

Examining the period from January 2014 to January 2015, Chief justice Allsop stated that the insurer should have acted earlier than it did.

Chief justice Allsop noted that it had arranged for the trustee to request another opinion from the doctor in October 2014. This was about 8 months after the doctor’s report had been considered by the insurer in early February. By early November the respondent had the doctor’s now unequivocal views in the report.

“Given [the applicant’s] history, evident condition and all the circumstances, greater despatch was necessary in 2014 than was shown by the respondent in order for the respondent to reasonably respond to the necessity to reach an honest and reasonable opinion called for by the policy,” he stated.

“If that despatch and recognition for the position of Ms Brown had been shown, the respondent would have called for [doctor’s] views in August, been given them by mid to late September, and been in the position to make the decision that it in fact made in January 2015, in mid-October 2014.”

Chief justice Allsop concluded that the applicant was entitled to interest calculated under s 57 of the Act from 15 October 2014 to 21 January 2015.