Life Decision Reference 2019-0258

Case OutcomeSubstantially upheld
Subject MatterLife
Date20 August 2019
Conducts Complained OfResults of policy review/failure to notify of policy reviews,Dissatisfaction with customer service , Failure to provide correct information
Finantial SectorInsurance
Decision Ref:
Product / Service:
Conduct(s) complained of:
Results of policy review/failure to notify of policy
Dissatisfaction with customer service
Failure to provide correct information
Substantially upheld
The Complainants’ policy is a unit linked open ended protection policy. The Policy was
taken out in August 1998. The Policy was reviewed in 2016 and the Provider increased the
premiums from €37.20 a month to €358.64 a month for the same level of life cover of
The Provider took over the policy from the original underwriter of the policy.
The complaint is that the Provider has not correctly or reasonably administered the
The Complainants’ Case
The conduct complained of relates to the Provider's implementation of its Policy
Review Process, which ultimately resulted in a recommendation made in June 2016
that either the premium needed to be substantially increased or the cover to be
greatly reduced.
The Complainants also state that it was their understanding that following a meeting
with the Provider's agent / advisor, in 2010, they agreed to enact a 'new policy' for a
- 2 -
reduced amount of cover of €70,000, for a reduced monthly premium of €37.20 and
that they believed this was a fixed premium for life and would not change.
The Complainants state that at no time were they warned that their future premium
would need to be increased by a level of 864% just to maintain the same cover.
The Complainants want the Provider to maintain the €70,000 cover at a cost of
€37.20. The Complainants consider that this is what was agreed by them with the
Provider in 2010.
The Provider’s Case
The Provider's response to the Complainants' complaint is to point to the fact that the
Terms and Conditions of the Complainants' Protection Options Plan allows for periodic
reviews of the policy, with the implied possibility that either the premium may need to
be increased or the benefits reduced, in order to maintain the policy in the future.
The Provider states that reviews were carried out at regular intervals, as well as on each
occasion that alterations to the level of cover were made to the policy, such as in 2002
and 2010. The Provider submits that at each occasion up to June 2016, the result of
these reviews was that the Complainants' premium was deemed to be sufficient, in
conjunction with the policy's accumulated fund value at the time, to sustain the chosen
level of cover until the next scheduled review.
The Provider says it is unfortunate that by June 2016 the cost of providing the
Complainants' chosen amount of cover had reached a level which neither the current
premium nor the accumulated fund value could support the costs until the next
scheduled review in August 2017. The Provider states that it is a matter of fact that the
Complainants' accumulated fund value had fallen from €2,990.05 in 2014 when this
Protection Options Plan had passed a previous review, to just €511.46 in June 2016,
when the Provider was obliged to issue the recommended options to the Complainants,
which are the subject of this dispute. The Provider submits that the monthly cost for
providing life cover of €70,000 on both lives assured had reached €174.86 by that time
and would continue to rise as the lives assured got older. The Provider states that on
this basis there was a monthly deficit of €137.66 between the monthly premium and the
cost of providing the cover and this deficit was being made up from the policy's
accumulated fund value, which would soon be depleted unless an increase in the
premium was agreed or the level of cover reduced.
The Provider says that contrary to the Complainants' belief, it was never possible either
in 1998 or more recently for the Provider to predict the quantum of increase needed
when their policy would fail to pass a given review.
The Provider refers to the Complainants' assertion that they believed they had switched
from a reviewable life policy to a fixed premium policy in 2010, when they reduced their
cover from €132,533 on both lives with a premium of €157.06 per month, down to
€70,000 life cover with a reduced monthly premium of €37.20. In this regard the
Provider says it cannot accept this assertion on the basis that the Complainants received

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