A leading protection broker is threatening a class action law suit against the Prudential after it raised premiums and withdrew guarantees on new and pipeline critical-illness business.
Many IFAs are outraged and are vowing never to place business with the Pru again. Thousands of cases are affected by the move even though many applications were sent in months ago but delayed in an admin backlog.
National broker Lifesearch is instructing its solicitors, Whitman Breed Abbott & Morgan, to investigate a potential class action against the Pru and is urging all IFAs to contact the law firm to get involved.
This week, the Pru said that from April 17 it will be raising premiums and will stop writing guaranteed business in favour of reviewable rates. But it is the fact that it has decided to apply the measures to business that is still in the pipeline that has infuriated IFAs.
The Pru has refused to say what the average premium increase will be, saying each case will be determined on its own merits.
Pru has been the leading protection provider in recent weeks as other firms hiked premiums.
In an attempt to smooth over the policy change, the company is offering immediate 30-day free life and critical-illness cover worth up to a maximum of £100,000 to cases yet to receive an acceptance letter or who have yet to confirm their acceptance.
Lifesearch spokesman Kevin Carr says: “We are asking all affected parties to join forces in order to better hold the Prudential to account for its actions by seeking redress for losses of both clients and intermediaries with business in its pipeline.”
On the legal threat, Prudential spokesman Darragh Leeson says: “That is a matter for the company concerned and we would not comment any further.”
IFAs' anger, p2