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Over 30K sign petition for Friends Life to pay claim

Nic Hughes

An online petition calling for Friends Life to pay out on a life and critical illness policy for a father who died of cancer has amassed over 30,000 signatures.

Nic Hughes (pictured) died in October last year after being diagnosed with cancer of the gall bladder and secondary tumours in his liver.

He had notified Friends the previous January he intended to claim on his and his wife’s joint policy which would be worth in excess of £100,000.

The Observer reports at the time of applying for the life and critical illness policy in 2009 he had been suffering from an inflammatory bowel condition which he had disclosed in the application.

But Friends Life refused to pay out because it said Hughes had failed to answer two questions correctly, whether he had numbness or tingling in his face and limbs and whether he had ever been asked to reduce his alcohol intake for medical reasons.

A letter from Friends said: “The recent symptoms of numbness, loss of feeling and tingling sensations recorded in your medical records, together with the abnormal liver function tests you had, could have indicated the onset of a number of serious medical conditions. If they had known about them, our underwriters would not have been able to offer you cover for at least 12 months.”

The petition has been started by Hughes’ friend Kester Brewin to try and persuade Friends to pay out to his widow and child.

Brewin says: “Instead of focusing on his family in his last few months of life, he was forced to spend it battling his life insurance firm Friends Life over his critical illness policy. Despite declaring all previous illnesses, conditions Friends Life cancelled his policy.

“Nic was convinced that he had given them full disclosure and that when they offered him the policy, they had done their checks. To put it simply, he died of cancer, but they refused to pay over pins and needles.”

Hughes’ family have also complained to the Financial Ombudsman Service.

A Friends Life spokesman says: “We are aware of the current social media activity and the case in question continues to be a priority for senior management. We are listening and fully understand the sentiment around these difficult circumstances.

“However, when we consider an application for critical illness cover, we need to have full disclosure of all conditions and their symptoms so that we can properly assess the case.  It is clear in this case that medical symptoms were not disclosed in response to detailed questions on the application form which, had we been aware of them, would have meant we could not offer cover.

“The resolution of this case is a private matter for the family involved. As such, we have continued to liaise with them directly during this difficult time and whilst we look for a fast-track response to this case from the Financial Ombudsman. We will abide by any decision that the Ombudsman makes.”

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Comments

There are 29 comments at the moment, we would love to hear your opinion too.

  1. Tragic case. But the court of public opinion should not decide claims. Sounds like Friends Life are dealing with it as well as anyone could.

  2. A sad case, which emphasises the need for full disclosure. From what I can see, Friends’ position is understandable and it’s right that the Ombudsman gets to decide.

  3. I had a similar case several years ago, Friends Provident declined the claim initially, then re-opened it and payed a propotional amount based on the information they had obtained after the death of the life assured. They paid about 80% of the claim, or to put it another way, the premium would have been loaded about 20% had they known the full medical details. I thought they handled it really well, and fair

  4. Very sad circumstances, and everyone would have sympathy for his family.

    However, I would be very interested in more details on the processing of the case, not least, through which distribution channel was it sold, and were the disputed questions not answered, or answered incorrectly.

  5. Surely Friends Life and all life offices have a duty of care to spot anomalies such as this during the underwriting process – isn’t that what is is for?

    Given that he has disclosed a medical condition in the application, surely they would have requested a GP report at the time?

  6. I agrew with all the comments above so far. A very sad situation and my condolences to the family. It does sound like FP are handling it sensibly and the FOS will ultimately decide.
    The issue which is key I think however is “had we been aware of them, would have meant we could not offer cover.”
    I have a client who was too embarassed to disclose his level of alcahol consumption. I knew him well, but I didn’t realise he was an alcaholic. He put down his alcahol consumption much nower than it really was an failed to mention the shakes he was getting, which turned out NOT to be from the alcahol, but early symptoms of Multiple Sclerosis. The insurer (Scot Prov) , gave the same answer i.e. they wouldn’t have insured him at all were the info accurate. If it had been immaterial or had it only resulted in a rating, they would have still paid, but adjusted accordingley, which I thought fair. Because it WAS a material ommission, they refunded ALL his premiums, which they did not have to do.
    The most dissapointing thing was that before the plan was arranged, he did have CIC with a different provider, but it was a very limited range of CIC conditions, didn’t include children’s cover and as it had been arranegd by a direct provider was more expensive for less cover.
    I rarely rebroke cover now for CIC bassed on conditions and premiums, especially anything pre 2003 when CIC definitions changed.
    I will be interested to see what the FOS say as this could set a precedent of what an insurer will expect and if FOS force FP to pay up, then premiums are likely to go up for all new plans and any with renewable terms.
    Very sad for the family, but I don’t think FP should be paying based on the ifno to hand I am afraid.

  7. This is a very sad case and does emphasise the importance of full disclosure but surely it also should put greater emphasis on the insurance companies to check details and indeed medical records.

    The alcohol question is an interesting one as are we seriously saying that individuals when they are teenagers who may have drunk more than 35 units of alcohol in a week and should this still have an effect many years later. Surely disclosure also has to reasonable as the word “ever” is in my opinion too vague and will probably mean that 90% of the UK population would have their life and critical illness policies rated. The better question could be “in the last 5 years”.

  8. My God. Quick, give Peter Herd a column of his own.

    He has more opinions than I have clients.

  9. Rule 1 – Avoid wherever possible doing business with firms owned by Vulture Funds
    Rule 2. Remember the 1st Rule of Insurance – “we will take your premiums and fight like hell to avoid paying any claim”.
    Why on earth weren’t these anomalies taken up and the application stage? Surely it is incumbent on the life office to satisfy themselves at outset that all the questions have been satisfactorily answered before accepting the risk. If subsequently there has been an untruth on the form (EG Smoker not declared) then of course that is a valid reason to rebut the claim.
    But from what appears to be the situation in this case it would seem that the Life Office just didn’t follow up properly at the time – a far too common occurrence. I hope the Ombudsman gives then a right kicking and increases the award by an additional 50% for the aggravation caused to a dying man. (BTW where was his adviser in all this? Or did he buy from the Direct Sales force – therein lies a lesson if he did!)

  10. no-one will suggest that this is anything but tragic for the family involved. however, suppose i have a heart condition that i know will preclude me from effecting cover, and i then miss it off the app, only to then suffer cancer later.
    surely i am attempting to cover a condition non-associated with the non-disclosed and have gambled that the life office will pay based on FOS judgement or social-media pressure, with a worst-case-scenario of return of my premiums if the cover is nulled from outset.
    this would then mean that no-one should make a disclosure and simply gamble at the point of potential claim – or better still apply to one company with disclosure and another without and see what result suits best.
    sorry but i have to say that the rules of insurance and disclosure must stand.

  11. Rule 1 – Avoid wherever possible doing business with firms owned by Vulture Funds

    Rule 2. Remember the 1st Rule of Insurance – “we will take your premiums and fight like hell to avoid paying any claim”.

    Why on earth weren’t these anomalies taken up and the application stage? Surely it is incumbent on the life office to satisfy themselves at outset that all the questions have been satisfactorily answered before accepting the risk. If subsequently there has been an untruth on the form (EG Smoker not declared) then of course that is a valid reason to rebut the claim.
    But from what appears to be the situation in this case it would seem that the Life Office just didn’t follow up properly at the time – a far too common occurrence. I hope the Ombudsman gives then a right kicking and increases the award by an additional 50% for the aggravation caused to a dying man.

    (BTW where was his adviser in all this? Or did he buy from the Direct Sales force – therein lies a lesson if he did!)

  12. I see the comments here are from people well-informed in the field of insurance. But the point here is not whether refusing the claim is strictly justifiable. It is right and proper that the court of public opinion can raise the point that many lay-people feel, which is that insurers which take premiums for policies which turn out not to be valid, or which they refuse to pay out on, on the slightest of pretexts, are, to put it bluntly, scamming us. And to do this to a terminally ill man really is beyond the pale. The insurance industry needs reform, and if this campaign is what it takes, then all the better for us all.

  13. “The resolution of this case is a private matter for the family involved.”

    Like hell it is! It’s the business of every unsuspecting holder who may get swindled in this way for no legitimate reason whatsoever. The nature of this publication suggests to me that some of the pathetic – almost pro-company – comments here were made by people in the finance ‘industry’ (not an industry – they don’t make stuff on a large scale!). Best of luck to nic’s family – his disclosure was as full as could have been considered reasonable. Read the case details fully morons!

  14. @ William – We don’t have the full facts. The Ombudsman will hopefully obtain them and come to a conclusion. Key issues however are whether the ommissions mentioned in the article were material or not “.failed to answer two questions correctly, whether he had numbness or tingling in his face and limbs and whether he had ever been asked to reduce his alcohol intake for medical reasons”. The fcat this has been listed as the reason for the decline would tend to suggest that there is evidence that at the dtae of the proposal, the porr chap was having tingling and had been specifically advised by a Dr to reduce his alcahol consumption, but that the application answers differred. No posters are suggesting this was intentional, but it is still a mistake made by the policy holder and NOT the insurer and iIf they were material, then whilst it is very sad, but the terms were not correct and therefore it will be just return of premiums as others have said above.
    I have posted under my own name, so if you do choose to repl to me critically, then please give your full name.
    Let’s not all get to tied up with this case for now and what to see what the FOS come up with. I hope they find in the favour of Nic Hughes family, but on the evidence quoted in the article, in the courts I don’t think they would.
    No adviser wants there clients paying for a policy which will not pay out as there are NO winners. as was mentioned by earlier posters, although it is no consolation I know, the premiums will usually be refunded if the mistake of the policyholder was innocent, so the insurer has not gained and I think any commission paid to the adviser will be clawed back, so the adviser will not have gained either.

  15. @William.
    Ok lets completley disregard the 100’s of 1000’s of cases that get paid every year by life offices. Lets forget the difference these payouts have made to peoples lives and the financial security these products give them lets in fact just say this one unfortunate case is systematic of every single life insurance policy and claim that is currently in force and you call us morons.
    The sad fact here there has been some non disclosure and this has what has led to the situation.
    Was advise given it does not say so we do not know whether the outcome would have been different. I personally would like to think it would.
    I do not work for Friends but I think it is a sad state of affairs that the very rare bad claims experiances are given precident over the thousands of life changing payouts.

  16. Interesting comments above – perhaps mostly from people in the insurance business who see this as a test case.

    As a close friend of Nic’s I’d like to take you all for a drink and go through the human cost here. Then you might join the petition and recognise that the capability to contextualise at the point of the claim is highly important and is then little to do with form filling but the absolute relationship between the trust of the insurer and how they are comprehending what’s being asked. I too lost my wife to cancer at age 29. I’d like you to recognsie how it goes at that point…

    Without prejudice.

  17. @Andy – We are not taking sides, lets wait and see more of the facts when the FOS make their decision.
    Most of us have had clients who have had to make claims, we’ve had clients die and so on. We do understand the human cost.
    We’d all like to see the benefits paid to the family, BUT there are two sides to the story and the FOS will look at it and try and come to a fair conclusion. all we are trying to say, is that based on what has been quoted in the article, we would not be holding out much hope.
    As you are a close friend of Nic, tell us more about the context……. we’re listening, but is it any different to what has been quoted in the article?

  18. Nic was a brilliant man. A rare mix of top designer, playful mystic, punk-intellectual and wry humourist. His final job was as a university lecturer.

    He had had colitis for much of his life.

    Did he decide to get critical illness cover at age 41 thinking there was any chance that he would be at risk from contracting a rare form of cancer that the doctors had hardly ever seen in someone in his age? Of course not.. Did the doctors suggest that any symptoms that were tracked in his other illnesses contribute to the final diagnosis? I hear not. They all supported his claim and wrote to Friends Life.

    Once diagnosed with a savage form of cancer Nic like everyone else in that position had to reconcile himself to it. To having to say farewell to his 8 year old twins (I am Godfather to one). To explaining to them that he had no option but to leave them… Unbearable.

    At least at the back of his mind was the security that his lovely wife and family had been provided for as he had done the sensible thing financially. Like me and like many fathers this is a serious consideration at that stage. The carpet of life expectancy, of watching your children grow and mature, had been pulled from under him. All was lost but this financial aspect wasn’t.

    Can you conceive what it might then be like for a person of integrity to discover that you will not leave this life with that reputation as a provider in tact? Despite the fact that you had gone through the onerous form filling and responsibly taken that precaution the annoying bowel irritation that had nagged you all your life would come back for one final indignity.

    I watched a brilliant, strong man stare into the middle distance and say to me “it’s all collapsed Andy”.

    He didn’t deserve that.

    It’s enough to part this life and leave your children behind, I know because I had to accompany my wife to that point and begin the task of raising my daughter alone the next day. But to do that and feel that you’d failed your family and left this compromised legacy behind you because of a mistake on a complex medical form which the doctors around consider to have been ultimately of no consequence but you are going to the grave carrying as a shadow on your shoulder…

    In my view if someone had any insight into this as an insurer they might have bitten the bullet and got on with doing the decent thing and not left it to your widow and 40,000 appalled onlookers to carry on that fight.

    The number will grow because from this side of the fence – not on technicalities but on natural decency, even though it is now too late for him, Nic’s case looks clear cut.

  19. A review of the approach that FOS takes to these situations should help understand the issues.
    In prior cases they have suggested that whilst the terms of the policy might have been different had they known about the other conditions, they also note that whilst agreeing that there may have been some non-disclosure, that non-disclosure might not in fact be relevant to the final diagnosis and the company should remain liable.
    There is then some calculation which squares up the premiums payable and / or cover payable based on what is most likely to have happened had it all been done right from the outset.
    I have to say that I too would have thought Friends would have got a GP report which you would have expected to state the conditions which have now come to light …
    But it’s not straightforward – and the issues should be properly considered and not decided by social media. Advisers are not morons – we recommend these policies because we believe they have real value and will pay out when they should. And we have nothing to gain by being apologists for companies which fail to deliver the benefits we have advised our clients to take up – the consequent loss of trust harms everyone.

  20. @ Andy – I really do understand what you are saying.
    Gill Cardy has explained things much better than I ever could and this is why I really think we need to wait and see what the FOS say before anyone comments too much, what has been said isn’t clear cut without seeing the application form and the process Friends went through. The FOS will get to see everyhting they want to, you and I can’t.

  21. Surely the is a matter of contract law?

    The fact that the provider have received the application, processed it, and then issued a policy document without asking further questions or exclusions, does this not constitute offer and acceptance? The policy document / schedule is the binding document stating what they are covered for.

    A good barrister would get this one paid out very quickly.

    Provider is trying it on!

    If the client didn’t answer questions, then why would they accept the business and go on risk?

  22. Gill and Phil,

    You guys are coming across very sympathetic and understanding.

    You need to know that this was not the experience of Nic and family when they made the claim. They did not get the kind of sympathy you are portraying. Friends Life were factual to the point of being dismissive.

    Neither is that the experience of the family at the moment. Friends Life are currently being sophisticated in their PR. They have put out tweets saying that ‘they have been in contact with the family’ as if they were making proactive steps to resolve and make peace. In fact the only contact made has come from the other direction, when the family have contacted Friends Life through their lawyer. I think the general public would read ‘we have been in contact with the family’ as suggesting that they have reached out to find some resolution. That is not the case. To me it looks patently disingenuous, they are managing their public image.

    Similarly Friends Life have said that they are trying to speed up the process with the ombudsman in order to find a resolution, implying that this will limit the stress on the family. The family have no notice of this, and the onus is on them at the moment to find and produce all the evidence to support their case. Again this is friends life PRIng themselves positively. Nic’s widow has requested a more human, face-to-face conversation with the Chief Executive of Friends Life, because she is conscious that’s nearly 50,000 people now are making their voice heard, furious as many are of what seems like an inhuman situation.

    If you knew Nic’s wife, deputy director of one of the U.K.’s largest charities, victim support UK, you would realise she is a deeply humane person and does not want this to dissolve into some kind of semantic legislative battle. She, like you, thinks that reducing the complex world of life and death and immediate finances to something as bald as form- filling does nobody any favours. People in the finance industry need to know that they are working across the boundaries of human suffering, human hope and the finer details of declaration. If financial advisers can’t support their clients to get this right, and companies can’t see through the nuances of what someone with a medical condition as lingering as Nic’s might encounter when declaring their medical history then they are not doing a great job, and life assurance will not get a great reputation. For instance when Nic was asked about alcohol intake it was in the context of how to mitigate some aggravating symptoms relating to colitis. He never saw it as an instruction particularly relating to problem alcohol use. But that’s how it appears when you read it on a form. Like the other questions about pins and needles these all came with the colitis.

    Anyway, I’m sure you will want the ombudsman to sort it all out, but you need to know that the world looks on right now and sees a situation where a family looks to have been wronged, and it seems that a very wealthy corporation, founded on high values, has overlooked this and preferred to take it to arbitration based on the letter of the law and not the spirit or intention of the case. Friends Life and life assurance is not coming out looking good. This will, as I understand it, go much bigger in the press next week, and you will possibly regret them not serving the industry better…

  23. PS sorry I forgot to say that the CEO refused the offer to meet Nic’s widow.

  24. When setting up insurance policies I work on the following principal – don’t give the insurers any excuse not to pay out.

    The number one reason for insurance companies not paying out is non-disclosure. For people with even slightly complicated medical history, the GP report is a welcome burden as the insurer can’t then turn around later to say you didn’t disclose relevant information.

    My personal view in this case, is that FL could and should have requested further information from the GP regarding the ulcerative colitis disclosure. This may have brought up further information relating to the numbness/tingling and reduced alchohol intake which could have been addressed at the time.

    It’s hard to speculate any further without knowing the full facts of the case, but unless FL can show they would have discovered the cancer that ultimately killed Nic on further investigation, then I would be inclined to say they should pay up.

  25. @Andy Thornton

    I have every sympathy with the experiences you relate and if you read my post (which was duplicated) you will see that I have very little time for insurance companies.

    I have been in this industry a fair time (20 yrs +) and have never failed to be underwhelmed by the way these firms operate. Both to the insured, the advisers who provide their bread and butter and very often to their own staff as well. (Just look round this site for current news and you will see firings in the run up to Christmas). Yes they are all heart.

    Our regulator tries to micromanage the small adviser who (dare I say it) often has his clients’ interests very much to heart; while bleating on about Treating Customers Fairly and then turning a blind eye to the sort of treatment meted out to Nic.

    This unfortunately should be a lesson to all those taking out any type of insurance. Wear fireproof gloves and be sure to dot every ‘I’ and cross every ‘t’ and never expect good faith. Prepare for the worst and it is advisable to have a good adviser who (if necessary) will fight your corner. Or ensure you have a good solicitor.

    Regrettable there are too many advisers who have come through the ranks of the insurance companies and have been irredeemably inculcated with their culture – often defending them in the face of overwhelming evidence to the contrary.

  26. @ Andy Thornton | 9 Dec 2012 10:47 pm – Thanks for the extra info. I hope the FOS loom at this sooner rather than later. I have been trying to speed them up with looking at a case one of my clients is pursuing against LTSB, but it is taking ages beauase of all the PPI sales.
    You have explained the siuation very well in your latest posting and I think if the FOS find in Nic’s favour, they should be looking towards a significant distress payment.
    If they don’t find in favour……. let’s wait and see what the FOS says before we go there.
    The ABI guidlines on non disclosure changed some years ago from teh principle of Uberimae Fida (ultimate goodfailt, i.e. any error, no payout), to much more of a focus on MATERIAL facts.
    A medical report may have been wise for FP.
    Was an adviser involved or did Nic arrange his critical illness cover directly with Friends?

  27. May be of use to Andy Thornton
    Providers could face liability for tied and multi-tied adviser errors

    Published: 07:00 Tuesday 24 July 2007

    By Lauren MacGillivray, News Reporter

    Providers should be held liable if tied or multi-tied financial advisers make a mistake on a client’s application for protection cover, say two law reform bodies.

    In a joint consultation document (http://www.lawcom.gov.uk/insurance_contract.htm) the Law and Scottish Law commissions, which advise government, say at the moment it is not clear by law who is responsible if a protection claim is denied.

    The commissions said insurers have a ‘close relationship’ with tied and multi-tied advisers, so they should be responsible for mistakes those advisers make.

    The paper also calls for a better legal distinction between tied, multi-tied and independent intermediaries to ensure the right parties are held accountable.

    Tammy Goriely, a lawyer who worked on the consultation paper, said: ‘It causes real problems when it appears the intermediary is acting for the insurer, and then suddenly the policyholder finds they’re liable for the mistakes. The law is incredibly unclear about who an intermediary is acting for at a particular time.’

    Kevin Carr, head of protection strategy for LifeSearch, warned it may not be easy to categorise advisers into three groups for legal purposes. ‘It’s a grey area in terms of the service provided because there’s so much variation. There are traditional IFAs, mortgage brokers, websites, call centres, and people like us who are effectively IFAs over the phone.’

    Richard Barningham of Cardiff-based RM Financial Advice said: ‘We’re re-inventing the wheel as far as the consumer is concerned. We’ve just gone through depolarisation and made the changes, with tied, multi-tied and independent, having had polarisation five years before. Now we want to re-write the rule book again.’

    Basic law of agency dictates that if an intermediary is considered to be an insurer’s agent, then the insurer is liable for any mistakes made. And if the intermediary is considered to be the policyholder’s agent, the policyholder is liable.

    The commissions want to define independent as one who does a fair analysis of the market, which is how the European Union’s Insurance Mediation Directive defines it.

    The commission also surveyed 190 Financial Ombudsman Service (FOS) consumer cases and found that 25 of the 190 involved allegations about what an intermediary said or did during the sales process.

    Goriely said if the intermediary is independent, the policyholder should still be liable. But she said the commission wants it made clearer to consumers that they can bring a case against intermediaries to the FOS.

    Email responses to commercialandcommon@lawcommission.gsi.gov.uk. The Law Commission will use the feedback to make recommendations to Parliament.

  28. This article skews the facts in the Insurance company’s favour.

    In a letter Nic’s doctor said:

    “I wish to state categorically that neither of these two events are related to his current diagnosis. I also wish to stress that 10 or 20 units of alcohol per week are within the Department of Health’s recommendations of safe levels.”

    “Again, I do not understand why these two pieces of information have somehow been used to deny him a payment under his Critical Illness Policy.”

  29. Thansk everyone for helpful contributions – hopefully you saw Suzy on Channel 4 news last night. A very impressive representation of her position I think.

    As she said – Friends Life checked the medical records before offering the cover. I don’t know if there was an agent.

    They are doing a truly awful job of protecting their reputation here don’t you think?

    Andy

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