Not upheld: administrative error - failure to send policy review letter on time; refund of premium paid complaint against ReAssure Life Limited

Decision detail

Summary

Mrs H held a whole of life insurance policy with ReAssure for over 30 years. ReAssure failed to send her the mandatory policy review letter in January 2025, resulting in Mrs H paying an annual premium of £24,558.43 before receiving the review options in May 2025. Had she received the review on time, Mrs H would have cancelled the policy and received a surrender value of £10,250.37 instead of paying the premium. ReAssure accepted the error and calculated Mrs H's loss at £34,808.80, paying this amount plus £1,343 interest and £500 compensation. Mrs H sought the full surrender value shown in her February statement (£36,771.42) plus a refund of the premium, but the ombudsman found ReAssure's redress was fair and reasonable as it placed her in the position she would have been in had the error not occurred.

The Ombudsman's reasoning

The ombudsman established that ReAssure had made an error by failing to send the policy review letter on time. The key question was whether ReAssure's financial redress fairly restored Mrs H to the position she would have been in had the error not occurred. The ombudsman agreed with ReAssure's timeline that Mrs H would have received the review in late January 2025, considered her options, and surrendered the policy by 28 March 2025. At that date, the surrender value would have been £10,250.37 (without the premium payment). Therefore, Mrs H's loss was £34,808.80 (the premium paid minus the surrender value she would have received). ReAssure's total payments of £34,808.80 plus 8% simple interest and £500 compensation fairly compensated Mrs H for the error, the time without funds, and the distress caused.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website