Scottish Provident has been criticised over its claims-handling policy on a consumer watchdog TV pro...
Scottish Provident has been criticised over its claims-handling policy on a consumer watchdog TV programme.
The ITV programme We Can Work it Out covered complaints from two Scottish Provident policyholders who both had their critical illness claims rejected.
While the first, an angioplasty claim, has now been settled in response to the show, the second, a multiple sclerosis claim, remains unpaid.
Morag Smith, an adviser at the Clydesdale Bank, took out a Scottish Provident critical illness policy in 1997 and in 1998 was diagnosed as having multiple sclerosis. But on receiving her claim form the insurance company refused to pay out because she had not disclosed a pins and needles problem suffered three years prior to her application.
Roger Edwards, sales and marketing manager at Scottish Provident, said that while he could not legally release confidential medical details about Smith, she did not disclose necessary information in her application.
Speaking on the programme, Edwards said: "Mrs Smith consulted with her doctor several times and was referred to a neurologist. We do not expect applicants to remember every cough and cold they have, but we do expect them to remember something that was so serious that their GP referred them to a specialist."
Speaking after the show, Edwards said that it was not fair on other policyholders for the company to bend the rules on this occasion.
"Would it be fair on all our policyholders that did disclose their full medical details but ended up paying more in premiums as a result to pay Mrs Smith?"
This case has highlighted the problem that some clients do not fully understand application forms.
Smith said: "There is a problem if the customer is not considered qualified enough to fill in the form on their understanding of their medical situation, and if the GP is not either, who is?"
While Edwards said that this emphasises the need for independent financial advice, Nick Kirwan, chairman of the ABI critical illness working party said that Smith cannot be blamed for her error.
"You cannot expect a customer to know what is and is not important. If an insurance company wants specific answers it needs to ask specific questions."
The first case involved an angioplasty claim where treatment was only needed on one rather than two arteries.
Speaking on the television programme, the policyholder's doctor said that if the angioplasty had not have gone ahead he would have been at a high risk of suffering a major heart attack or even death, and on further consideration of the man's condition Scottish Provident decided to pay the claim.
Edwards said: "From a legal point of view, we could have said no. However, it is in the spirit of critical illness to pay out when people are critically ill - in this case we did not look carefully enough at the underlying condition."
Kirwan said that this case emphasises the need for transparent headings in key features documents and that if the company requires two arteries to be treated before a claim can be made, this should be detailed in the heading.
Scottish Provident rejected 14 claims in the year up to November 1999. In just under half of those, the reason for rejection was non-disclosure of medical information.
