TAL delayed and fought the nurse's insurance claim at every step,the royal commission heard,dredging up and misrepresenting medical and other records to allege she had an undisclosed,pre-existing mental illness - despite detailed medical evidence to the contrary.

Even when the matter went to the Financial Ombudsman Service,the insurer fought on,at first refusing to reinstate her insurance policy - which it had wrongly cancelled - and then attempting to force her to pay more than $2000 in premiums up front before it would pay out,in direct defiance of FOS.

TAL's own legal team observed that"every facet of TAL's decision"had been rejected by FOS.

Its conduct stepped up when the former nurse started receiving her benefits,and after a TAL employee Googled her and discovered she had written a book about weight loss and had been speaking about it at public libraries.

The company trawled social media,government,property and company records seeking information about the former nurse and hiring the private investigator.

TAL forced the former nurse to complete a daily activities diary,despite being given medical advice that the requirement was exacerbating her condition,including inducing"severe anxiety attacks".

TAL also claimed to FOS that it was entitled to require the diary under the terms of the policy,and that this was standard industry practice - claims that Ms van Eeden admitted,under questioning,were misleading.

"What justification could there be for telling FOS that?"Commissioner Kenneth Hayne asked Ms van Eaden at that point."I've got no idea,Commissioner,"she replied.

"What am I to conclude about it? What conclusion do you say I should draw from just this little aspect of this story?"he asked. Ms van Eeden said the behaviour of the team was"inappropriate".

The royal commission was shown other internal emails that - in the words of senior counsel assisting Rowena Orr QC -"belittled"the former nurse,including one from a TAL medical officer to her case manager containing a photo of her pulled from the internet with the subject line"a picture of your favourite claimant".

The surveillance was,I want to put it to you Ms van Eeden,deeply inappropriate,wasn't it?

Counsel assisting the commission Rowena Orr

In 2014,it cancelled the former nurse's payments,accused her of fraud and demanded she repay $69,000 - a demand set out in a letter that also contained reams of notes from the surveillance conducted on her,the royal commission heard.

"The surveillance was,I want to put it to you Ms van Eeden,deeply inappropriate,wasn't it?"Ms Orr said."Yes,it was,"the TAL executive replied.

Ms van Eeden,who will return to the stand on Friday,also agreed that the letter sent to the former nurse"would have caused considerable distress".