Not upheld: Other regulated complaint complaint against Red Sands Insurance Company (Europe) Limited

Decision detail

Summary

Mr and Mrs B complained that Red Sands Insurance Company (Europe) Limited unfairly settled their travel insurance claim proportionately after discovering that Mrs B had not fully disclosed all her medical conditions at policy inception. Although Mrs B had declared some significant medical conditions, her GP records showed additional conditions that were listed separately and not disclosed. Red Sands settled the claim at 52.21% of the treatment cost, based on evidence that the premium would have been £1,059.26 instead of £553.08 had all conditions been disclosed. The ombudsman found the disclosure questions were clear, the undisclosed conditions were not merely clinical features of declared conditions, and Red Sands' evidence was reliable. Under CIDRA, proportionate settlement is the appropriate remedy for careless misrepresentation, and the ombudsman did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA), which requires consumers to take reasonable care not to make misrepresentations. The disclosure questions were clear and required all medical conditions to be declared. Although Mrs B declared some significant conditions, the GP records showed additional conditions listed separately that were not disclosed. The ombudsman rejected the argument that undisclosed conditions were merely clinical features of declared conditions, as they were listed separately by the GP. Red Sands provided sufficient evidence that it would have charged a higher premium (£1,059.26 vs £553.08) had correct information been provided, making this a qualifying misrepresentation. Under CIDRA, proportionate settlement is the appropriate remedy for careless misrepresentation. The ombudsman found Red Sands acted fairly in following the law and settling proportionately.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website