Not upheld: unfair policy review outcome, incorrect response deadline, alleged lack of transparency and fair treatment complaint against ReAssure Limited

Decision detail

Summary

Ms G complained about ReAssure's administration of her reviewable whole of life insurance policy, specifically the 2025 review outcome requiring premiums to increase from £17.77 to £109.97 or face a reduction in sum assured from £56,839 to £19,971. She also objected to a retrospective response deadline in the review letter (dated 6 February but requesting reply by 19 January). ReAssure partially upheld the complaint, apologising for the typo and offering £100 compensation, but maintained the review outcome was fair. The ombudsman did not uphold the complaint, finding ReAssure had contractual discretion to review and adjust the policy, the premium increase was justified by reduced investment growth assumptions (from 4%-8% to 2.5%), and the options provided were reasonable. The £100 compensation for the incorrect deadline was deemed fair and sufficient.

The Ombudsman's reasoning

The ombudsman found that ReAssure had contractual discretion to review the policy and adjust premiums or sum assured under the policy's terms. The significant premium increase was justified by reduced investment growth assumptions (from 4%-8% to 2.5%) since 2020, which meant the investment fund would not grow sufficiently to sustain the policy for life without changes. The options provided (maintain sum assured with higher premiums, maintain premiums with lower sum assured, or surrender) were reasonable and in line with policy terms. The £100 compensation for the incorrect response date was fair, and Ms G was unlikely to have taken up the premium increase option as she stated it was unaffordable. The ombudsman rejected arguments that the premium increase was unreasonable or that ReAssure failed to provide sufficient information or options.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website