Not upheld: Travel / life insurance claim disputes complaint against Legal and General Assurance Society Limited

Decision detail

Summary

The estate of Miss E complained that L&G unfairly cancelled her life and critical illness insurance policy and refused to pay a claim following her death. L&G had identified that Miss E misrepresented her smoking status and lung condition on the application form. The ombudsman found that Miss E failed to take reasonable care in answering the clear smoking question, and GP records confirmed she was smoking occasionally within the relevant 12-month period. Under CIDRA, this constituted a deliberate or reckless qualifying misrepresentation, permitting L&G to cancel the policy and decline the claim. The ombudsman did not uphold the complaint, noting that L&G's refund of premiums exceeded the minimum remedies available under CIDRA.

The Ombudsman's reasoning

The ombudsman applied CIDRA to determine whether Miss E's misrepresentation was qualifying and whether it was deliberate or reckless. The ombudsman found that Miss E failed to take reasonable care in answering the smoking question, which was clear and unambiguous. GP records confirmed she was smoking occasionally within the relevant 12-month period. L&G's underwriting evidence demonstrated it would have offered different terms (smoker's rates) had the correct information been provided, making it a qualifying misrepresentation. As the misrepresentation was deliberate or reckless rather than careless, CIDRA permitted L&G to cancel the policy, decline the claim, and retain premiums. Since L&G refunded the premiums, it provided a more favourable outcome than CIDRA required.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website