This is a most interesting case.
Consumer makes claim on life insurance policy
Insurer refuses full payment…offers reduced figure of £95k
Reason: policy declaration omitted relevant matters…diabetes, cholesterol, high BP
Reason for death did not include these issues
Claimant accepts reduced offer…ex gratia…full and final…finish !
But claimants partner reads medical records…diabetes was AFTER policy taken out
Takes legal advice…case goes to FOS
Adjudicator finds in favour of firm as full and final offer accepted previously
Claimant ask for Ombudsman’s opinion
Ombudsman says cholesterol and high BP were over 5 years before policy form completed
so the firm did not need them to be declared
Diabetes was after policy started
Ombudsman over-rules Adjudicator, insurer must pay in full…over £400k
But FOS can only award £150k max
Insurer does not pay quickly, ignores lawyer’s letters
Lawyer contacts The Guardian newspaper…Insurer pays up.
A lot of contentious points here…IMHO !
Ombudsman overruling Adjudicator does not happen very often… Why ? Well in their Annual Review FOS say:
“Because of the way ombudsmen share knowledge with adjudicators – and because our approach is well-established in most areas – it’s unusual for an ombudsman to reach different conclusions to the adjudicator who initially looked at a complaint. In 92% of final decisions this year, the ombudsman didn’t recommend anything different to the adjudicator. Where they did, it was usually because new facts or evidence came to light only after the adjudicator had given their answer.”
So when the Ombudsman overrules the adjudicator it’s usually because new facts or evidence came to light…but in this case this does not seem to be the case…A link to the story is below… I cannot find the official FOS decision on their website but you can search for it at the link below