Last month, former policyholder, Juliet Ignatiev, whose deceased husband's life cover claim was ...
Last month, former policyholder, Juliet Ignatiev, whose deceased husband's life cover claim was turned down in 2004, ended up receiving a full payout (plus interest) after the Financial Ombudsman Service (FOS) ruled in her favour, and demanded that Scottish Widows should cough up.
While cases being overturned in a policyholder's favour are nothing new, this instance was different as the ruling represented one of the biggest victories by an individual against a provider on a disputed insurance claim, with £295,689 being paid out. There have been other life cases where the FOS has made recommendations that exceed £100,000, but, in the vast majority of cases, the amount would be much less.
The Ombudsman's decision to rule in favour of Ignatiev was due to lack of evidence of any material non-disclosure. Whether the FOS wanted to make an example of this case or not only time will tell, but what is clear is that the insurer in this instance is being deemed as 'guilty until proven innocent'.
While this case is a one off, it may mirror things to come and should serve as a warning to providers to ensure they have enough evidence to prove that any claims they may decline on the grounds of non-disclosure will be strong enough to deem the policyholder guilty of it no matter whether they think they are right or not.
Declined claims due to non-disclosure has become a massive issue for the industry and has added further strain to the already shaky relationship between the industry and customers. Having more cases where the FOS rules in favour of the policyholder and demands the insurer pay out the whole sum (if not more) will certainly not help. Preventing this from happening in the first place is the only way forward.
Johanna Gornitzki, editor
