Term Insurance Decision Reference 2019-0055

• Jurisdiction: Ireland
• Case Outcome: Rejected
• Date: 28 March 2019
• Year: 2019
• Conducts Complained Of: Rejection of claim – partial rejection ,
• Finantial Sector: Insurance
• Reference: 2019-0055

Decision Ref:

2019-0055

Sector:

Insurance

Product / Service:

Term Insurance

Conduct(s) complained of:

Rejection of claim – partial rejection

Outcome:

Rejected

LEGALLY BINDING DECISION

OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

Background

The complaint is made on behalf of the estate of a deceased person who purchased a

mortgage related Life Assurance Policy (“the policy”) with the Respondent Provider on 27

March 2008 and sadly passed away in May 2015. The estate of the deceased then sought

the benefit provided for under the policy. The Provider expressed concern that the deceased

had failed to disclose a material fact as regards her health - namely the deceased had

attended a Consultant Psychiatrist for depression on 20 February 2005, 7 April 2005, 28 July

2005 and 8 September 2005, and was prescribed anti-depressants until January 2006 and

from October 2011 – at the time of the inception of the policy. Specifically, the deceased

answered in the negative to two medical questions relating to whether she had attended a

specialist in any hospital or clinic for advice or treatment, and whether she ever suffered

from, or had treatment for, mental illness.

- 2 -

/Cont’d…

The Provider insisted that had it been awa re at the time of the application for the policy of

the medical evidence supplied to it in January 2017, then a rating would have been applied

to the deceased’s plan, which would have meant either an increase in the premium or a

proportionate decrease in the amount of cover offered.

Rather than decline the claim due to non-disclosure of material fact, as the Provider claimed

it was entitled to do, the Provider applied the appropriate rating to the level of cover and

paid a lower proportionate claim.

The Complainants’ Case

The Complainants now seek the full benefit from the policy. It is their submission that in

making a substantial reduction to the amount paid out on foot of the policy, the Provider

did not adequately review the medical evidence, and incorrectly and inappropriately

diagnosed the deceased as suffering from depression.

The Complainants maintain that, while the deceased did suffer from some anxiety and stress

in relation to exams, and had sought help from her doctor, she did not have a diagnosis of

depression, and that therefore she had not failed to disclose any material facts regarding

her health.

The Complainants also submit that the product sold to the deceased was incorrect, as they

say it is not clear from documentation (a) whether the deceased was offered any other

similar type of product at the time, (b) why this particular life assurance policy was chosen

or activated on her behalf, and (c) whether she was offered independent legal advice before

completing the relevant documentation.

The Complainants further submit that the financial review and subsequent application

process regarding the policy were carried out in a hurried manner, with a failure to

emphasise the importance of answering all the medical questions posed. They also maintain

that the Provider was not acting in compliance with requirement 5 of Chapter 5, and

requirement 24 of Chapter 2 of the Consumer Protection Code 2006.