Not upheld: claim settlement, notification of cover, interest rate applied complaint against Royal London Mutual Insurance Society Limited (trading as Scottish Provident)

Decision detail

Summary

Mr B complained that Royal London should have informed him of his critical illness cover when he made an income protection claim in 2011, rather than waiting until he discovered it and claimed in 2025. He argued this caused financial hardship and that Royal London should have applied a higher interest rate to the backdated benefit. Royal London accepted the claim and paid £50,000 (the maximum benefit) with interest backdated to 2014, plus compensation for a five-month delay in paying the interest. The ombudsman did not uphold the complaint, finding that Royal London was not obligated to notify Mr B of his cover and that the backdating, benefit amount, and interest applied were all fair and reasonable in the circumstances.

The Ombudsman's reasoning

The ombudsman found that Royal London was not required to notify Mr B of his critical illness cover when processing his income protection claim. It is the policyholder's responsibility to bring a claim, not the insurer's responsibility to remind them of available cover. The medical evidence supported that the permanency requirement was not met until 2014, making the backdating appropriate. Royal London paid the maximum benefit available under the policy (£50,000) and applied interest as a gesture of goodwill. The five-month delay in paying interest was addressed with additional interest and compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website