Friends Life has maintained its position on the rejected critical illness and life insurance claim of a father of two that died of cancer, despite a high-profile campaign backed by celebrities Stephen Fry and Miranda Hart for it to reverse its decision.
The insurer's position throughout the case has been for the dispute to be put to the Financial Ombudsman Service (FOS) as it was "the independent and approved route for resolving disputes".
A Friends Life spokesperson said: "Our position is very clear. We cannot go into details of specific cases for confidentiality reasons. The statement stands alone and covers all the issues for us.
"A lot of the debate and coverage has commented on the fact that the non-disclosure seemed to be separate from the man dying from cancer. What has been missed is that had it been disclosed we would not have offered cover so there would never have been a policy."
Last week The Observer published the story of Nic Hughes, the 44-year-old father of twins, who died in October - less than a year after being diagnosed with cancer of the gall bladder.
Friends Life rejected his claim for a payout on life insurance and critical illness cover and cancelled his policy alleging non-disclosure.
The statement on its website Friends Life said: "It is clear in this case that medical symptoms were not disclosed in response to detailed questions on the application form...", but added: "We are listening and fully understand the sentiment around these difficult circumstances."
Mr Hughes declared his problems with ulcerative colitis at the time of application but Friends Life said he failed to reveal symptoms of pins and needles and numbness despite being asked direct questions.
The exact wording in the disclosure application form that Hughes declined to disclose on was "numbness, loss of feeling, tingling or loss of feeling in the face".
Friends, family and doctors treating Hughes said Friends Life should have realised the symptoms could result from his ulcerative colitis and were not connected to the illness that killed him, The Guardian reported.
Stephen Fry backed the campaign to reverse the decision on 4 December tweeting to 5.31m followers: "Man dies of cancer, insurance policy won't pay due to pins and needles. Please ask @friendslifetalk to do right thing".
Alan Lakey, partner at Highclere Financial Services, said the high profile nature of the case was " a shame" because it would cast doubt in the minds of other existing policyholders.
He said: "It is tricky because technically Friends Life is right. But to the man in the street they may have certainly believed they had disclosed everything fully. There is nothing to suggest fraud in this case, he genuinely thought he had fully disclosed.
"I have been slightly concerned for years now about how claims are being tightened up mainly because of the price wars. There are some claims rejected now that could very well have been paid a few years ago."
Lakey added that the industry should use the gender-neutral re-price to "add some fat" to policies, increase margins slightly and bring more flexibility into the claims process.
He said the answer was for full medical records to be sent to insurers despite cost increase and potentially less attractive prices.
In its statement Friends Life said: "The resolution of this case is a private matter for the family involved. As such, we have continued to liaise with their nominated representative directly during this difficult time and, last week, we made an unconditional offer of financial support whilst the matter is reviewed by the Financial Ombudsman.
"In line with our standard industry practices, following the discovery of non-disclosure Friends Life cancelled the policy and all premiums received from the family were immediately refunded in full."
For directly authorised member firms
Completes first part of integration
Leading the charge