Whole-of-Life Decision Reference 2022-0335

• Case Outcome: Upheld
• Reference: 2022-0335
• Date: 06 October 2022
• Year: 2022
• Subject Matter: Whole-of-Life
• Finantial Sector: Insurance
• Conducts Complained Of: Mis-selling (insurance),Complaint handling (Consumer Protection Code) , Delayed or inadequate communication, Failure to process instructions, Premium rate increases

Decision Ref:

2022-0335

Sector:

Insurance

Product / Service:

Whole-of-Life

Conduct(s) complained of:

Mis-selling (insurance)

Delayed or inadequate communication

Complaint handling (Consumer Protection Code)

Failure to process instructions

Premium rate increases

Outcome:

Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The complaint concerns a Professional Body’s group life insurance policy, which is

underwritten by a named Insurer. The policyholder is the Professional Body, and the

Complainant is a member of the group life insurance policy.

The Provider, an intermediary, sold the policy to the Complainant.

The policy provides for life cover in the sum of €500,000 up to the age of 50, reducing to

€350,000 from the age of 51 to 65.

The Complainant’s Case

The Complainant states that when the Provider sold him the life insurance policy in

October 2015, the Provider advised him that because he was under the age of 40 when

joining the group life policy, his monthly premium would remain fixed at €22.50 per month

for the entire duration of his policy until his 65th birthday.

The Complainant states that the Provider supplied him with this information in emails

dated 9 October 2015 and 21 October 2015.

- 2 -

/Cont’d…

The Complainant states that when he became a member of the group policy on 18

November 2015, he relied upon the express confirmations from the Provider that his

premiums would remain at €22.50 per month until he was aged 65.

The Complainant states that, in a letter dated 19 October 2018, the Provider informed him

that his monthly premiums would be increasing, following a review by the Insurer. The

Complainant submits that the Provider advised that the premium increase would be

phased as follows:

• from 1 December 2018, premiums would be €33.75 per month; and

• from 1 December 2019, premiums would be €45 per month.

The Complainants states that he disputed this increase, in a letter to the Provider dated 14

November 2018, to which the Insurer was cc’d, in which he stated that the premium

increase was contrary to the contract he entered into, or that if the contract did not

provide for a fixed premium, then he had been mis-sold the product. However, the

Complainant states that the Insurer proceeded to increase his monthly direct debit to

€33.75 in January 2019, before he had received any response to his complaint. The

Complainant submits that he wrote to the Provider on 10 May 2019, seeking an update, as

he had not received a substantive response to his complaint, although six months had then

passed.

The Complainant states that while he discussed a number of proposals with the Provider in

May and October 2019 to resolve this dispute, including an offer that the Provider refund

all of the premiums paid to date, and a proposal for a new life insurance policy with

guaranteed premiums of €52.76 per month for the duration of the policy, these proposals

were unacceptable to the Complainant, because he would have had to enter into a new

life insurance policy which would be subject to underwriting and which would have

increased premiums.

The Complainant states that the Provider informed him that it was not willing to pay the

difference in the increased premiums over the duration of the policy, as this “would give

rise to a tax liability on the part of the [Provider] and [the Complainant]”.

The Complainant contends that “I relied upon [the Provider’s] confirmations about the

premiums to my detriment and I have been mis-sold the Policy”.

The Complainant is seeking compensation of €15,733, which is the financial loss he states

that he will incur, due to the application of increased premiums over the duration of the

Policy.

The Provider’s Case

The Provider states it was engaged by a Professional Body to put a group life insurance

policy in place with the Insurer, which was incepted in June 2006, and that the

Complainant became a member of this Scheme in November 2015.