Partially upheld: Other regulated complaint complaint against Principal Insurance Limited
Financial Ombudsman decision DRN-2629255 of 2021-01-15T00:00:00+00:00. Other regulated complaint complaint against Principal Insurance Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-2629255 |
|---|---|
| Decision date | 2021-01-15T00:00:00+00:00 |
| Firm | Principal Insurance Limited |
| Product | Other regulated product |
| Claim type | Other regulated complaint |
| Outcome | Partially upheld |
| Remedy | Principal Insurance Limited must: (1) Pay Mr C the premium refund received from insurer Z for the policy cancelled in December 2017, with simple interest at 8% per annum from the date of cancellation to the date of refund; (2) Pay Mr C £300 compensation for distress and inconvenience arising from Principal's mistakes and oversights. |
Summary
Mr C complained to the Financial Ombudsman Service about Principal Insurance Limited's handling of his motorcycle insurance policies. A family member impersonated Mr C to obtain a policy for motorcycle V in December 2016, and Mr C explicitly told Principal in May 2017 that he had no interest in this policy. Additionally, when insurer Z requested NCD proof in November 2017, Principal contacted Mr C's previous insurer but failed to inform Mr C that he needed to contact them directly, resulting in policy cancellation and Principal retaining the premium refund. The ombudsman found that while Principal could not have identified the initial impersonation, it should have investigated the V policy matter more promptly and should have clearly communicated the NCD verification requirement to Mr C. However, the ombudsman concluded that Mr C's main difficulties stemmed from policy cancellations by a different insurer in 2016 that predated Principal's involvement. The complaint was partially upheld, requiring Principal to refund the premium with interest and pay £300 compensation.
The Ombudsman's reasoning
The ombudsman found that while Principal could not have identified the impersonation when policy V was initially set up (as the caller possessed accurate personal details and passed verification), Principal should have investigated further when Mr C explicitly stated in May 2017 that he had no interest in policy V. However, the ombudsman concluded that earlier investigation would not have prevented Mr C's main difficulties, as those stemmed from two policy cancellations by a different insurer in September-October 2016 (predating Principal's involvement with policy V) which appeared on the shared database and caused insurer A to void policy H. The ombudsman upheld the complaint regarding the NCD verification process, finding Principal failed to communicate to Mr C that he needed to contact his previous insurer directly, which could have prevented the policy cancellation. Principal was also found to have improperly retained the premium refund from Z rather than passing it to Mr C.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Principal Insurance Limited, all decisions | 10 | 25% |
| Other regulated complaint, all decisions | 19,202 | 17% |
| Other regulated product, all decisions | 51,105 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website