THE FINANCIAL Services Ombudsman (FSO) has been ordered by the High Court to review his rejection of a woman’s complaint about an insurance company’s refusal to honour a mortgage protection policy following the death of her partner.
Friends First Life Assurance Ltd rejected Honore Kennedy’s application for a payout on the policy after her partner Andrew Pearn died in October 2005.
The insurer said Mr Pearn had not disclosed material facts relating to his medical condition.
Mr Justice Daniel O’Keefe ruled yesterday there were “defects” in the FSO’s decision and, as a matter of probability, it was impaired by “a series of serious and significant errors”.
Friends First claimed Mr Pearn had not revealed his full medical condition when the policy application was being completed by an agent for the insurer in the presence of Mr Pearn and Ms Kennedy in April 2005.
It would have declined cover had full relevant medical information been provided, it said.
Ms Kennedy, of Ardfert, Ardrahan, Co Kerry, brought a complaint to the FSO claiming her partner was meticulous in furnishing details and the only matter which arose when the insurance proposal was being filled out was in relation to Mr Pearn’s cholesterol problem, which was under control.
A deputy FSO, who dealt with the complaint, said medical information on Mr Pearn indicated he was prescribed medicines in recent years before his death; there was a family history of hypertension on the male side; and he underwent tests which showed he suffered from hypertension and hypercholesterolaemia.
As this had not been disclosed before the insurance was taken out, the company was entitled to repudiate the claim, the deputy FSO said.
Ms Kennedy asked the FSO to review the deputy’s decision but he also rejected her complaint.
Ms Kennedy appealed the matter to the High Court, saying the FSO failed to address the fact the insurance company agent, who worked for First Active – a then tied agent for Friends First – was responsible for filling out the form.
Eliza Kelleher, for Ms Kennedy, argued the agent was given all relevant material about Mr Pearn’s medical condition and the deputy FSO should have interviewed Ms Kennedy and/or the agent in order to reach a decision on the balance of probabilities as to what information had been disclosed.
The FSO and Friends First, a notice party, denied the claims.
Yesterday, Mr Justice O’Keefe remitted the matter to the FSO on the grounds that the reasons given for rejecting the complaint were inadequate. The FSO had not specified the factual matters upon which his decision was based and whether or not such matters were of sufficient materiality to justify the repudiation of the policy, he said. He found the decision of the FSO was “vitiated by a series of serious and significant errors”.
Ms Kennedy was entitled to a decision which spoke for itself and relied on accepted or established facts which did not require amplification or correction in any material manner through affidavit testimony supplied by the FSO, the judge said.