Family wins case against AMP after life insurance claim denied because of unanswered emails

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AMP cancelled an Adelaide woman’s life insurance while she was dying because she failed to respond to emails sent to her former work address.

But a court has found her family was still owed her payout since there was no doubt she would have wanted to continue with her life insurance policy since she knew she was very unwell.

Now, Carolyn Burns’s two brothers will be paid out a total of $260,000 after winning their case against AMP Super in South Australia’s District Court.

Mr Burns was born with spina bifida and used a wheelchair throughout her life.

She died aged 54 in October 2019.

Super changes led to mishandling

In July 2019, changes to superannuation law came in to prevent life insurance that some people never knew they even had eating up inactive accounts with low balances.

The accounts affected were handed over to the Australian Taxation Office (ATO) to handle.

Ms Burns’s account was among those affected, since she had not touched it since losing her job in 2014, because of her worsening health.

She had worked at adult education provider WEA helping people with disabilities access training.

Despite knowing she no longer worked there, AMP sent a notice to her old email address at the WEA in April and June 2019, warning that her life insurance would be cancelled unless she replied.

Ms Burns first heard about her account possibly moving to the ATO in August 2019 — when her health was already failing — and asked in a phone call for AMP to send the information by a letter since she had not received any other notice about the issue.

“She told them she had received no emails from them and was ringing them in response to a letter they had sent her by post at that time,” her brother Mark Steer’s lawyer, Peter Scragg, said.

“They decided to do nothing but knew from that time she hadn’t received the required notices of whether she should opt in or not.”

AMP sent a letter on October 10, 2019, but it did not explain that Ms Burns’s insurance had been cancelled.

At the time, Ms Burns was on her deathbed in hospital and never received the letter.

She made her last life insurance premium payment in June 2019.

AMP claimed ‘inferred consent’ for email

In its defence, AMP said it was simply following the law about inactive accounts and that Ms Burns had supplied the old email address to AMP while working at the WEA.

It said it had “inferred consent” to send her information via email because she had provided an email address to them, and that they sent her a letter in 2014 confirming her contact details and another in 2016 saying they were moving to digital notices.

While finding AMP did not engage in misleading and deceptive conduct or unconscionable conduct, Judge Michael Burnett found Ms Burns “would have elected to maintain the life insurance benefit” if she had been communicated with by letter.

“Having maintained the life insurance cover over a long period of time, it would be illogical to cancel or surrender that benefit at a time when it may lead to a payment being made to her estate,” Judge Burnett said in his judgement published this week.

However, he noted AMP “cannot be expected to inquire” about every email address on file, especially if it did not receive a bounce-back message.

Mr Scragg said the family was “delighted” at the judgement, but had not yet received any payment.

He said other people would also be in a similar situation to Ms Burns’s family, with 504 emails sent out by AMP to people like Ms Burns.

“I personally feel it’s fairly reprehensible … There was no proper follow-up,” Mr Scragg said.

“The agents were deducting commissions for their services and at the same there was no supervision or management of her interests at all in relation to the matter.”

An AMP spokeswoman said the company was “very sorry for the loss experienced by Ms Burns’s family and we acknowledge the service provided did not meet their expectations”.

“By law, if no contributions have been received into an account for 16 months, regardless of the fund balance, the insurance must be cancelled unless the member takes action,” she said.

“Prior to any insurance being cancelled, we notify members several times of the upcoming change via the contact details AMP has on record and we are reliant on the member to inform us if they change their details.”

(Original ABC Article)