Are we going too far with client verification?
I have just had a call from Norwich Union with regard to an application for term insurance that I submitted to them recently.
The quote and application form were downloaded from my website and I have never spoken or seen the client. They sent in an original bank statement to satisfy the new ABI rules for verification purposes using regulation eight and this was duly completed on the appropriate form and sent to NU.
I have today just been informed that I need to do full verification of the client's wife as the bank account for the bank statement (which is the same account as the direct debit) is in joint names and even though the policy is in the client's name only, his wife is deemed to be a contributor as it is a joint account.
This is for a policy that will only pay out on death and has no surrender value at any time and the guaranteed monthly premium is only £7.80 throughout the policy's life.
It could be used for security against a loan but the client would need to be dead for it to pay out.
I should also add that at the same time I submitted to NU a case for mortgage protection with critical-illness cover for the same client but in joint names, again made by my website. The verification form submitted in this case was fine using regulation eight as the policy and bank statement were both in joint names.
I do not even believe this is a legal requirement under the appropriate act but seems to have come about since the ABI issued their guidelines.
I am all for appropriate legislation for verification purposes but is this not just going too far?