Rethinking mental illness exclusions in the context of the Ingram decision

In a recent VCAT decision, QBE Insurance (Australia) Ltd was held to have engaged in unlawful discrimination when it refused to indemnify a claimant under a travel insurance policy, relying on a mental illness exclusion in the policy. This decision is a reminder to the insurance industry that if legislation requires the industry to rely on actuarial or statistical data when dealing with mental illness exclusions in policies, that data must exist at the time the particular policy was issued to the market. It also reinforces the importance of history and information management, and the retention of data that underpinned why an exclusion or term was introduced in a policy.

The fact that the exclusion is common in the market is not a defence.