Ireland: Serious Illness Cover Misunderstood But Not Mis-sold

In two separate recent judgments, the High Court has upheld decisions of the Financial Services Ombudsman (FSO) in relation to claims regarding serious illness cover. 

In the case of O'Regan v Financial Services Ombudsman, the appellants were a married couple who believed their mortgage protection policy included cover for serious illness.  However, a claim for rheumatoid arthritis was refused by their insurer on the basis that the policy did not in fact include serious illness cover.  The couple complained to the FSO who found that the complaint was unsubstantiated.  The appellants appealed the FSO's decision to the High Court and the High Court remitted to the FSO the matter for an oral hearing as there was conflicting factual evidence. 

Having held an oral hearing, the FSO found that the documentary and oral evidence did not support the allegation that the insurer had removed serious illness cover from the appellants' policy without their knowledge or consent.  It was clear from the policy documentation that serious cover illness had not been provided and the complaint was not upheld. The appellants appealed the finding to the High Court.  In the second appeal, Mr O'Regan claimed that he and his wife had been misled in relation to the extent of the cover and in general made the case that they should have been believed by the FSO.  He also alleged that the paperwork had been "doctored" since the original complaint was made, that the medical definitions for serious illness had been altered without medical reason and that there were inconsistencies in the documents put before the FSO. 

While the High Court expressed sympathy for the misfortunes that had befallen the appellants, the Court concluded that there was no serious or significant error in the FSO's approach to the case, the handling of the oral hearing, the assessment of the case and the drawing of inferences from the evidence. 

In a second case, Geoghgan v Financial Services Ombudsman, the appellant and her husband had added a critical illness benefit to their life assurance policy in 1999.  From 2006 onwards, the critical illness cover was described on the annual notices sent to the appellant and her husband as "accelerated specified illness cover".  The appellant's husband was diagnosed as suffering from cardiomyopathy in 2008 and sought to claim under the critical illness policy in 2009.  The claim was declined by insurers on the basis that cardiomyopathy was not covered under the "heart attack" definition in the policy. 

The appellant complained to the FSO on the basis that she and her husband believed they were covered for all manner of serious illness under the policy, rather than only certain specified illnesses.  At the time of making the complaint, they had paid in excess of €40,000 in premiums.  They also alleged that the policy was mis-sold and at the time of signing of the proposal form, the appellant was not advised that only specified illnesses were covered by the policy.  However, the FSO was precluded from investigating the circumstances of the sale of the policy or the nature of the information provided to the appellants in relation to the policy at the time it was sold, in circumstances where this had occurred more than six years previously. The FSO subsequently carried out an investigation into the balance of the complaint but concluded that the medical evidence supported the insurer's decision to decline the claim in dispute and thus the claim was not substantiated. 

During the course of the appeal to the High Court, the appellant submitted that she and her husband had always understood that all major illness would be covered by the critical illness policy and that owing to the high monthly premium, they would not have taken out the cover had they known it covered only specified illnesses.  It was alleged that the critical illness cover changed in 2006 and as a result it was subsequently described as "accelerated specified illness cover".  The appellant also sought to rely on evidence that the insurer had accepted claims in respect of cardiomyopathy from claimants whose policies were commenced at the same time as that of the appellant and her husband. 

The Court considered that the case arose from a particularly unfortunate set of circumstances in that since 1998 the appellant and her husband had paid considerable monthly premia to the insurer in respect of the unit link to life assurance policy, to which critical illness cover was added in 1999.  However, while the Court had a great deal of sympathy for the appellant and her husband, the Court noted that its role was limited to considering whether or not the FSO had erred in its decision and that the relevant test was clear from a long line of case law, namely was the decision reached by the FSO vitiated by a serious and significant error or series of errors.  The Court was satisfied that the FSO did not err in his decision on the basis of the information which was before him and was also satisfied that the FSO was precluded from considering the alleged mis-selling of the policy given that the policy had been sold more than six years previously. 

The Court accepted it was clear from the documentation that the name of the illness cover changed without warning in 2006 from "critical illness cover" to "accelerated specified illness cover".  The Court accepted however that this change occurred in order to clarify that the cover at issue was limited to illnesses specified in the policy rather than covering all illnesses.  While the Court could reasonably draw an inference from the change that there was some confusion amongst policyholders in relation to the nature of the policy which would, at the very least, warrant a pragmatic and equitable response from the insurer in relation to the appellant's claim, this did not alter the reality that the appellant and her husband had signed a proposal form at the time of taking out the cover which expressly stated which illnesses were covered by the policy. 

With regard to the evidence that the insurer had upheld claims from other policyholders who suffer from cardiomyopathy, notwithstanding the absence of cover for this illness, the Court noted that, while this understandably compounded the appellants sense of unfairness and frustration at the insurer's unwillingness to engage with her claim in an empathetic manner, it was clear from the case law that the Court could not compel the insurer to deviate from the "obstinate stance" it had adopted.  The Court did comment however that, while financial service providers and institutions have obvious commercial responsibilities and various duties and obligations, in certain special circumstances where a patent unfairness arises they should not be precluded from acting with an appropriate deal of empathy towards consumers. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.