In­sur­ers’ se­cret spy­ing

The Tribune (NZ) - - YOUR HEALTH - ROB STOCK rob.stock@fair­fax­me­

The South­ern Re­sponse insurance sur­veil­lance scan­dal has lifted the lid on an insurance in­dus­try se­cret.

Pri­vate in­sur­ers from time to time hire pri­vate in­ves­ti­ga­tors to do se­cret sur­veil­lance on se­lected of their pol­i­cy­hold­ers.

The case of South­ern Re­sponse hir­ing a pri­vate in­ves­ti­ga­tor to spy on Christchurch earth­quake-dam­aged home owner Cameron Pre­ston is be­ing in­ves­ti­gated by the State Ser­vices Com­mis­sion.

Prime Min­is­ter Jacinda Ardern called the South­ern Re­sponse spy­ing ‘‘to­tally in­ap­pro­pri­ate’’.

In­ap­pro­pri­ate? In­ter­est­ing word, but ac­tu­ally apt.

Some­times in­sur­ers do think it ap­pro­pri­ate to hire pri­vate in­ves­ti­ga­tors to spy on pol­i­cy­hold­ers they be­lieve are de­fraud­ing them. The aim, as shown in a 2011 Insurance and Fi­nan­cial Ser­vices Om­buds­man case, is to find ev­i­dence some­one is ly­ing in a claim. In that case, the in­surer got ev­i­dence of a man do­ing work tasks he was sup­pos- edly un­able to do.

An in­surer who catches a pol­i­cy­holder ly­ing in a claim has the right to de­cline the claim, tear up the pol­icy, and save it­self a lot of money.

This can lead to peo­ple be­com­ing unin­sur­able.

In a 2007 case one in­surer hired a pri­vate in­ves­ti­ga­tor to watch some­one who had been on a long-term med­i­cal claim, but had come off. The man had not be­gun a new claim, but his in­surer had learnt of a re­lapse of his de­pres­sion.

I asked life in­surer Fidelity Life when it would hire a PI to surveil a pol­i­cy­holder.

It would only do it in ‘‘ex­treme’’ cases, it said. Se­cret sur­veil­lance had to be ap­proved by a panel of se­nior ex­ec­u­tives, and only in cases where it was ‘‘fair and rea­son­able’’.

I had a chat to a PI to find out what they were al­lowed to do. They can’t make se­cret voice record­ings of con­ver­sa­tions they aren’t a party to. They can how­ever watch a per­son’s house, and spy on them in pub­lic places, and places to which the pub­lic has ac­cess. This may be done by us­ing re­mote video cam­eras (usu­ally in vans). They may film, or take pic­tures of peo­ple in pri­vate gar­dens, if they can be seen

from a pub­lic space. There was a grey area on whether track­ing de­vices could be planted on peo­ple’s ve­hi­cles.

In­sur­ers of­ten hire in­ves­ti­ga­tors to look into claims, and in­ter­view claimants. This can be in­tim­i­dat­ing, and gru­elling, though at least it is up­front and in the open, un­like the se­cret sur­veil­lance.

Any­one want­ing to know how stress­ful be­ing in­ter­viewed, some­times re­peat­edly, by a pri­vate in­ves­ti­ga­tor is, should read the Aus­tralian Guilty Un­til

Proven In­no­cent re­port by the Fi­nan­cial Rights Le­gal Cen­tre.

It said peo­ple with le­git­i­mate claims could be in­tim­i­dated into with­draw­ing them, and called for more trans­parency, and for in­sur­ers to com­mit to a code of con­duct around the use of in­ves­ti­ga­tors.

Con­sumer af­fairs min­is­ter Kris Faafoi is do­ing a long over­due re­view of insurance. He should be aware of this is­sue. While the po­lice need a war­rant to spy on a per­son, in­sur­ers do not. A per­son does not have to an­swer po­lice ques­tions. Insurance poli­cies re­quire pol­i­cy­hold­ers to co­op­er­ate with in­sur­ers at claims time.

The law does set some lim­its on how pri­vate in­ves­ti­ga­tors can spy on you.

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