Not upheld: inadequate disclosure of policy charges and unfair policy review outcome complaint against ReAssure Limited

Decision detail

Summary

Mr and Mrs S complained about the outcome of their whole of life insurance policy review in 2025, which resulted in either a premium increase from £29.97 to £88.86 or a reduction in sum assured from £19,914 to £13,073. They chose not to increase premiums, resulting in the reduced sum assured. An FOS investigator upheld the complaint, finding ReAssure had not provided sufficient information about policy charges and that Mr and Mrs S would have surrendered the policy in 2014 if fully informed. The ombudsman disagreed, finding that while ReAssure did breach regulatory requirements by not disclosing charges, Mr and Mrs S would not have taken a different course of action because they would not have been aware of the 2025 premium increase, which was not foreseeable based on ReAssure's assumptions at the time. The ombudsman found ReAssure's revision of investment growth assumptions from 8.5% to 2.5% was reasonable and necessary to provide accurate information.

The Ombudsman's reasoning

The ombudsman acknowledged that ReAssure failed to provide sufficient information about policy charges, which was a regulatory breach. However, the ombudsman found that the critical information Mr and Mrs S possessed was that the policy was reviewable and that ReAssure's assumptions at the time indicated premiums of £29.97 would sustain the policy for life. The ombudsman reasoned that even if informed about charges exceeding premiums in 2014, Mr and Mrs S would not have been told about the 2025 premium increase to £88.86, as this was not foreseeable based on ReAssure's assumptions at that time. The ombudsman found ReAssure's revision of investment growth assumptions from 8.5% to 2.5% was reasonable and necessary to provide accurate information, not negligent. The ombudsman concluded that poor market conditions, not negligence, caused the assumptions not to materialise.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website