Not upheld: claim declined - misrepresentation on application form complaint against Zurich Assurance Ltd

Decision detail

Summary

Mr C complained that Zurich Assurance Ltd unfairly declined his critical illness insurance claim following a multiple sclerosis diagnosis in July 2024. Zurich declined the claim because Mr C had failed to disclose that he experienced tingling in his limbs in the weeks before applying for the policy, when answering a specific neurological question on the application form. The ombudsman found that Mr C failed to take reasonable care as required by the Consumer Insurance (Disclosure and Representations) Act 2012, as the question was clear and the symptoms fell within its scope. Although Mr C attributed the symptoms to a new office chair and work boots, the ombudsman accepted Zurich's conclusion that this was a qualifying misrepresentation. Zurich provided underwriting evidence showing it would have imposed an exclusion for multiple sclerosis and central nervous system conditions rather than declining entirely. The ombudsman upheld Zurich's position and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) standard, which requires consumers to take reasonable care not to make misrepresentations. The neurological question was clear and its relevance would have been apparent to a reasonable consumer. Although Mr C provided explanations for the symptoms (new chair and boots), the ombudsman found it was not unfair or unreasonable for Zurich to conclude he failed to take reasonable care, as he had experienced tingling in the limbs for at least a week before applying. The ombudsman was satisfied the misrepresentation was qualifying because Zurich demonstrated through underwriting evidence that it would have imposed an exclusion (not declined entirely) had the question been answered correctly. Therefore, Zurich's treatment was fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website