Not upheld: inadequate communications and failure to provide clear information about policy costs and future premium requirements complaint against Aviva Life & Pensions UK Limited (formerly Norwich Union)

Decision detail

Summary

Mrs Y complained about how Aviva administered her whole of life insurance policy taken out in 1993, specifically regarding communications at policy reviews from 2008 onwards. The policy was reviewable with no guarantees beyond the first ten years, and Mrs Y's selected premium of £15 monthly proved insufficient to maintain the original £100,000 cover, resulting in cover reductions at the 2008 and 2018 reviews and a significant failed review in 2023. The ombudsman found that Aviva failed to provide Mrs Y with adequate information about the policy's escalating costs relative to premiums—information that should have been disclosed by 2008—and that this breached FCA standards for fair communication. However, the complaint was not upheld because the ombudsman concluded on the balance of probabilities that Mrs Y would not have made different decisions about the policy even if properly informed, based on her demonstrated preference for maintaining cover and her consistent rejection of premium increases.

The Ombudsman's reasoning

The ombudsman found that while Aviva failed to provide Mrs Y with clear information about the policy's costs and how they were increasing relative to premiums—information that should have been communicated by the 2008 review—this failure did not cause Mrs Y loss. The ombudsman applied the balance of probabilities test and concluded that even if Mrs Y had been provided with complete information in 2008 about the policy's cost trajectory and future premium requirements, she would not have made different decisions. This conclusion was based on: (1) Mrs Y's demonstrated preference for the policy's life cover benefit despite its importance to her; (2) her rejection of premium increases at both the 2008 and 2018 reviews, suggesting she was unwilling to pay more even when aware of the lack of guarantees; (3) her failure to take action even after receiving cost information from 2019 onwards; and (4) the lack of evidence supporting her post-hoc claim that she would have paid up to £30 monthly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website