Not upheld: inadequate disclosure and communications regarding policy review outcome and future sustainability complaint against Phoenix Life CA Limited

Decision detail

Summary

Mr and Mrs P complained about Phoenix Life's administration of their whole of life insurance policy taken out in the late 1990s, specifically regarding the outcome of the 2025 policy review which required either a significant premium increase to £226.44 per month or a substantial reduction in sum assured. The ombudsman found that Phoenix's communications did not meet FCA regulatory standards as they failed to provide key details about charges, future premium increases, and available options to mitigate poor outcomes. However, the complaint was not upheld because the ombudsman determined that Mr and Mrs P would not have taken a different course of action such as restructuring the policy or obtaining alternative cover, given that they had ignored similar warnings in 2009 and 2014 reviews without taking any action.

The Ombudsman's reasoning

Although Phoenix failed to provide the required level of clear, fair and not misleading information about policy performance, charges, future premium increases and reduction options as required by FCA Principles 6 and 7 and COBS standards, the ombudsman found that Mr and Mrs P would not have taken a different course of action even if fully informed. The ombudsman based this on the fact that despite receiving clear warnings in 2009 and 2014 that the policy would not last indefinitely and would require changes, Mr and Mrs P took no action to restructure the policy or obtain alternative cover. The ombudsman applied the balance of probabilities test and concluded that more information would not have prompted them to act differently.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website