Whole-of-Life Decision Reference 2024-0169

• Jurisdiction: Ireland
• Case Outcome: Partially upheld
• Date: 31 July 2024
• Reference: 2024-0169
• Finantial Sector: Insurance
• Conducts Complained Of: Premium rate increases ,Delayed or inadequate communication
• Year: 2024

Decision Ref:

2024-0169

Sector:

Insurance

Product / Service:

Whole-of-Life

Conduct(s) complained of:

Premium rate increases

Delayed or inadequate communication

Outcome:

Partially Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

This complaint concerns the Provider’s review of a Life Assurance Policy. The Policy was

sold by an Independent Intermediary in 1995.

The Complainant’s Case

The Complainant submits that he received a policy review letter from the Provider in July

2020 which offered him the following options:

•To increase his monthly premiums to Stg£220.96 (two hundred and twenty pounds

and ninety six pence) to maintain the current level of cover (Stg£25,815.00 –

twenty five thousand, eight hundred and fifteen pounds); or,

•To reduce the policy benefit to Stg£11,428.00 (eleven thousand, four hundred and

twenty eight pounds) and continue to pay the premium of Stg£87.75 (Eighty seven

pounds and seventy five pence).

The Complainant contends that he has paid, by way of premiums, the sum of

Stg£20,894.00 (Twenty thousand, eight hundred and ninety four pounds) into the policy

- 2 -

/Cont’d…

since inception, meaning that if he were to reduce the policy benefit in order to keep the

monthly repayments at the current premium, the premiums received by the Provider

would “far exceed the sum assured”. The Complainant states that the premiums have

“spiralled wildly beyond all expectations to the point of being unaffordable”.

The Complainant further contends that if he elected to pay the higher premium amount,

“he could find himself in exactly the same trap 5 years from now and face an even higher

premium increase”.

The Complainant submits that if he cancels the plan “he could lose even more”. He further

submits that the Provider is “acting in the utmost bad faith and manifestly not treating him

fairly”.

The Complainant states that the Provider should tell him the current annual life charges

and more importantly to assess whether he is receiving value for money.

The Complainant says that upon reading the Provider’s brochure “flexible protection to

meet all your needs”it had “lured him by boasting” that the flexible life plan represents

exceptional value for money. The Complainant states that this "halo effect" convinced him

to take out the Provider’s Unit linked whole of life plan as opposed to his financial adviser’s

recommendation to take out a unit linked whole of life policy with another provider.

The Complainant states that the “caveat”issued by the Provider (that is, the Provider’s

agreement to keep the cover in force for approximately 9 months while the complaint is

with the Financial Services and Pensions Ombudsman, saying that it cannot continue to

provide cover once the policy becomes unsustainable), should be removed because it is

“contrary to the spirit of the Ombudsman directives”.

The Complainant further states:

“It would appear also that in addition to the monthly premiums the Provider has taken

from the fund units to keep the cover in force for approximately 9 months to the 30th June

2021.”

The Complainant states that these units “should be put back into the fund”.

The Complainant states that the Provider was being “more than a little economical with

the truth” having also declined to furnish him with the formula on how it calculated the

increment of the premiums or reduction of the sum assured. The Complainant says that

the grounds cited were for commercial reasons. The Complainant states he needs

confirmation that the Provider would continue to furnish life cover for Stg£25,825.00

(twenty five thousand, eight hundred and twenty five pounds) with a monthly premium of

Stg£87.75 (eighty seven pounds and seventy five pence) without taking units from the

fund until the Ombudsman's adjudication of the complaint. The Complainant says that this

is a reasonable request, and the Provider should comply.

The Complainant wants the Provider to “restructure the policy” to suit his needs.