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Friends goes beyond FOS guidelines

Friends Provident says it goes beyond ombudsman guidelines on paying out on critical-illness insurance claims where there has been non-disclosure.

It says it now pays a proportion of the claim even when a client may have been reckless in their non-disclosure.

The company said last month it would pay a proportion of all unrelated non-disclosure claims but some life offices claimed they already pay out such claims under Financial Ombudsman Service guidelines.

But protection and actuarial manager Mark Jones says that Friends now pays claims which the FOS and other insurers define as reckless and tend to reject.

Jones says: “We do not regard as reckless and decline outright on the basis that the applicant ‘ought to have known’. We only treat as deliberate or fraudulent and decline outright if the evidence shows clearly that the applicant ‘must have known’.”

Orchard Independent partner Laurie Cumming says other companies should follow Friends’ lead.

He says: “It is too easy for insurers to find excuses and not pay out. The last thing you want is your claim to be rejected but even if someone has answered the questions in good faith they could forget something that happened years and years ago.”

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