SERVICE: Health
OUTCOME: Not upheld
Issues: Misselling/ misleading information/ misrepresentation
From October 2014, Mrs J held health insurance with the insurer.
In 2023, Mrs J applied for prior approval for hip surgery.
The insurer declined to pay for the surgery, because it said it was directly related to Mrs J’s pre-existing hip condition (the use of metalware in her previous hip operation prior to the policy being taken out).
Mrs J complained that the information with which she was provided when she arranged the policy was misleading. Mrs J said at no time was she informed that a replacement policy could result in a policy with reduced cover. Mrs J said the insurer was aware of her policy with another insurer and reassured her that she would have the same level of cover with lower premiums. Mrs J said, if she had been told that the prior surgery meant she would have no cover in the future, Mrs J would not have changed. Mrs J said she believed the sales agent was not fully aware of the policy details or was deceptive. Mrs J wanted the insurer to honour the policy as first offered and/or refund the premiums.
The insurer responded and said it believed it properly advised Mrs J of the policy’s pre-existing hip exclusion. It said, in October 2014, Mrs J telephoned the insurer and discussed moving from her previous insurer. The insurer recorded Mrs J’s pre-existing conditions as hips and knees and that she was ok with this. The insurer referred to an application warning that advised that no pre-existing condition was covered in the first 3 years, and that some pre-existing conditions were never covered, including hip conditions.
Mrs J told the case manager the telephone conversation and the insurer’s brochure gave her the impression that the insurer would provide the same cover she had had with the previous insurer, apart from the stand-down period.
The case manager’s assessment
Having considered the application warning, together with the insurer’s notes of the conversation it had with Mrs J, the case manager believed the insurer had provided Mrs J with adequate information to allow her to make an informed decision about changing policies. The misunderstanding was not the insurer’s fault.
The case manager also did not believe the brochure was misleading. It clearly set out that the cover for pre-existing conditions would not apply to pre-existing hip conditions, which were not covered at any time. The IFSO Scheme could neither compel the insurer to provide Mrs J with a policy covering all pre-existing conditions, nor require it to refund Mrs J’s premiums.
The case manager did agree that the insurers’ staff needed to clearly explain the pre-existing condition cover, the stand-down period and the fact that some conditions were never covered. While it was not clear that the staff member failed to do so when Mrs J telephoned, the case manager followed up with the insurer so it could ensure its staff were adequately trained to provide the relevant information.
Complaint No: 00229773