Not upheld: claim denial based on careless misrepresentation under CIDRA complaint against Aviva Life & Pensions UK Limited

Decision detail

Summary

Mrs G, on behalf of Mr G's estate, complained that Aviva unfairly declined a terminal illness claim on a life insurance policy taken out in March 2020. Aviva discovered through medical records that Mr G had used recreational drugs daily since early adulthood and had been diagnosed with focal segmental glomerulosclerosis (FSGS) in 2017 with ongoing specialist review, but had answered 'no' to questions about both matters on his application. The ombudsman found that Mr G failed to take reasonable care to answer Aviva's clear medical questions accurately, that this constituted a qualifying careless misrepresentation under CIDRA, and that Aviva's underwriting evidence demonstrated it would not have offered the policy had it known the true medical history. Therefore, the ombudsman upheld Aviva's decision to decline the claim, cancel the policy from inception, and refund premiums as fair and reasonable.

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 questions asked by Aviva were clear and specific, and the medical evidence demonstrated Mr G had not answered them accurately - he had used recreational drugs within the 10-year period and had been under specialist review for FSGS within the 2-year period. Mr G received a personal details confirmation form highlighting the importance of the health information and had 14 days to correct any errors but did not do so. Aviva demonstrated through underwriting evidence that it would not have offered the policy had it known the true medical history. The misrepresentation was classified as careless (not deliberate or reckless), and under CIDRA, Aviva was entitled to cancel the policy from inception and refund premiums.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website