Not upheld: claim rejection based on misrepresentation; eligibility assessment complaint against Exeter Friendly Society Limited

Decision detail

Summary

Mrs P took out an income protection insurance policy in February 2021, stating she had been registered with an NHS GP for over three years. When she claimed in 2022 after becoming unwell, Exeter obtained her medical records and discovered she had only been registered since January 2019, making her ineligible for the policy. Exeter rejected the claim, cancelled the policy from inception, and refunded premiums, classifying the misrepresentation as careless. The ombudsman upheld Exeter's decision, finding the GP registration question was clear, the misrepresentation was qualifying under CIDRA, and the remedy was appropriate for careless misrepresentation.

The Ombudsman's reasoning

The ombudsman applied CIDRA principles and found that Exeter asked a clear and specific question about GP registration that a reasonable consumer should have understood. The medical records provided objective evidence that Mrs P had not been registered for the required three years, constituting a misrepresentation. Since Mrs P was ineligible for the policy due to not meeting the GP registration requirement, the misrepresentation was qualifying. The ombudsman classified it as careless rather than deliberate, and found Exeter's remedy of claim rejection, policy cancellation, and premium refund was appropriate under CIDRA for careless misrepresentation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website