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FSA called on to investigate Scot Prov blunder

Scottish Provident has been referred to the FSA and the ABI by Exchequer Secretary to the Treasury Angela Eagle after its treatment of a cancer victim was highlighted in Parliament.

Labour MP for Wansbeck Denis Murphy brought his constituent Susan Hurrell’s case to Eagle’s attention during an insurance industry regulation debate.

Hurrell was told twice that she did not have terminal illness cover under her Scot Prov life insurance policy after being diagnosed with ovarian cancer in December 2004.

But in September 2006, after renewing the policy, Hurrell discovered that she did have a terminal-illness clause, which meant she would be paid in full as long as she was given less than 12 months to live at diagnosis.

ScotProv admitted its mistake and apologised but said she was not eligible for a payout because she did not die within 12 months of diagnosis. Hurrell’s doctor wrote to the insurer confirming that her life expectancy at diagnosis was “certainly less than 12 months”.

In Parliament, Murphy said: “Scottish Provident, backed by the ombudsman, is deliberately breaking the rule and spirit of its own policy as nowhere does it state that it must wait and see.”

Eagle said: “I will certainly refer this case to Hector Sants, the FSA’s chief executive. I want to write to the Association of British Insurers’ director general drawing attention to this case.” ScotProv declined to comment.

In other news, former Torquil Clark Life Insurance directors Jason King and Simon Platt are looking to launch an online protection brokerage by the end of the summer.

The pair left Torquil Clark in August last year, two years after it acquired Life Policies Direct, which they founded in 1999. The online brokerage will provide advice and quotations as well as allowing consumers to buy protection products online, something that King says is difficult to find.

King and Platt say they aim to reduce the burden of protection applications for brokers and consumers.

King says: “We are looking at how we can use the web to help consumers buy protection products. You can currently go to a broker’s website, fill in a form, speak to an adviser and perhaps even get a quote but you cannot follow through and buy the product. This is what we are looking at doing. We have talked about the process a lot – how expensive it is for brokers and how frustrating it is for consumers. We want to reduce that burden.”

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