Not upheld: claim settlement — dispute over whether condition meets policy definition of cancer; handling delays complaint against Royal London Mutual Insurance Society, Limited

Decision detail

Summary

Mr D claimed £100,000 critical illness benefit for dermatofibrosarcoma protuberans (DFSP), a rare sarcoma. Royal London obtained CMO opinions and medical evidence concluding DFSP was a non-melanoma skin cancer that had not spread to lymph nodes or distant organs, therefore not meeting the main cancer definition. Royal London paid £30,000 under the policy's Additional Conditions instead. Mr D disputed this, arguing the policy definition clearly included sarcoma. The ombudsman upheld Royal London's assessment, finding the policy definition was clear that non-melanoma skin cancers must have spread to lymph nodes or metastasised to qualify, and the medical evidence supported Royal London's conclusion. The ombudsman also found Royal London's remedies for eight months of handling delays (8% interest and £500 compensation) were fair and proportionate.

The Ombudsman's reasoning

The ombudsman carefully reviewed the policy definition of cancer, which explicitly includes sarcoma but excludes non-melanoma skin cancers that have not spread to lymph nodes or metastasised to distant organs. The medical evidence established that DFSP is a skin tumour classified as non-melanoma skin cancer, located in the dermis and subcutaneous fat with no evidence of spread or metastasis. Royal London's reliance on CMO opinions that DFSP with a '/1' suffix would not be considered invasive or malignant was reasonable. The ombudsman concluded Royal London fairly assessed the claim under the Additional Conditions definition, which appropriately covered Mr D's condition at £30,000. The delays were adequately remedied through 8% interest and £500 compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website