Upheld: unfair claim rejection / failure to handle claim promptly and fairly complaint against Canada Life Limited
Financial Ombudsman decision DRN-6175452 of 2026-04-15T00:00:00+00:00. unfair claim rejection / failure to handle claim promptly and fairly complaint against Canada Life Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6175452 |
|---|---|
| Decision date | 2026-04-15T00:00:00+00:00 |
| Firm | Canada Life Limited |
| Product | group income protection insurance |
| Claim type | unfair claim rejection / failure to handle claim promptly and fairly |
| Outcome | Upheld |
| Remedy | Canada Life must: (1) Accept and settle Mrs B's incapacity claim from the date the deferred period ended, in line with policy terms and subject to periodic review; (2) Add 8% simple interest to each benefit payment from the date due until settlement; (3) Pay £500 compensation for claim handling delays. |
Summary
Mrs B claimed incapacity benefit on her employer's group income protection policy after being signed off work in August 2024 due to anxiety, low mood and panic attacks related to workplace stress. Canada Life rejected the claim in March 2025, concluding Mrs B was suffering from 'burn out syndrome' rather than a covered medical condition. The ombudsman found that the evidence from Mrs B's treating consultant psychologist and psychiatrist, who both diagnosed mixed anxiety and depressive disorder, was more persuasive than Canada Life's medical officer's opinion. The ombudsman upheld the complaint, directing Canada Life to accept and pay the claim from the end of the deferred period in line with policy terms, plus 8% interest and £500 compensation for unreasonable delays in handling the claim.
The Ombudsman's reasoning
The ombudsman weighed the conflicting medical evidence and found the opinions of the treating consultant psychologist and psychiatrist more persuasive than Canada Life's medical officer. Both treating specialists diagnosed a psychiatric condition (mixed anxiety and depressive disorder) rather than mere workplace stress. While the initial cause was workplace-related, the evidence showed Mrs B developed a diagnosed mental illness that prevented her from performing her job duties. The ombudsman also found Canada Life handled the claim with unreasonable delays (5 months from claim submission to decision) without justification, causing unnecessary distress to a vulnerable person.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Canada Life Limited, all decisions | 195 | 20% |
Source
Read the original decision on the Financial Ombudsman Service website