Not upheld: Travel / life insurance claim disputes complaint against Cirencester Friendly Society Limited

Decision detail

Summary

Mr J complained that Cirencester Friendly Society Limited unfairly refused to consider him for income protection insurance because he could not provide five years of UK medical records, having lived in the Netherlands from 2001 to 2012. Mr J argued this discriminated against him based on his exercise of EU free movement rights. The ombudsman examined whether the refusal breached EU law (Services Directive and free movement principles) and UK discrimination law. Finding no applicable legal breach and recognizing insurers' legitimate commercial discretion over risk selection, the ombudsman did not uphold the complaint, despite acknowledging the firm's reasoning was questionable.

The Ombudsman's reasoning

The ombudsman found that Cirencester, as an insurance company, is entitled to exercise legitimate commercial judgment in deciding which customers to cover. The ombudsman examined whether the approach contravened EU law, specifically the Services Directive and free movement principles. The Services Directive excludes financial services including insurance. The free movement principle is primarily concerned with removing obstacles to EU citizens moving between member states, not with regulating insurance underwriting decisions. The ombudsman found no UK law or other applicable law that rendered Cirencester's approach unlawful. While acknowledging the reasoning was questionable (e.g., private doctors exist in both Netherlands and UK), the ombudsman concluded the firm had discretion over risks and the approach was not arbitrary.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website