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PMI complaints rise 39 per cent, says FOS

The number of private medical insurance complaints to the Financial Ombudsman Service increased by 39 per cent in the last financial year, its annual review has revealed today.

The number of PMI new cases to the FOS hit 514 last year, up 39 per cent on the previous financial year, which recorded 369.

However, the number of critical illness claims dropped by 8 per cent, to 586 last year compared to 2007’s 638.

Income protection complaints dropped by 7 per cent, from 832 in 2007-08 to 774 last year.

New complaints about whole of life policies and endowment savings-plans rose by just under 10 per cent.

The FOS says: “The continuing flow of complaints about increased premiums, or reduced sums-assured, in relation to so-called ‘reviewable’ whole of life policies stresses the need for businesses to explain clearly at the outset how these policies work.”

The Ombudsman also blamed payment protection insurance complaints for the record level of new complaints last year, which peaked at 127,471.

Today’s report confirms that PPI complaints increased three-fold, representing 31,066 of the 127,471 complaints.

Other trends blamed for the rise include complaints about credit cards, up by 32 per cent, complaints involving investments, increasing by 30 per cent, and complaints about buildings and contents insurance increasing by 29 per cent and 23 per cent.

The Association of British Insurer’s director of general insurance and health Nick Starling says the drop in CI complaints is a result of the ABI Code of Practice on long-term protection, an agreement whereby members agree to treat customers fairly when dealing with claims where they had unintentionally non-disclosed.

He says: “This is good news for consumers. It means people can be confident that when they buy a critical illness policy, they know it will pay out if it is needed.”

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