Campaign against ADL policies to feature in BBC series
The winner of a Financial Ombudsman Service case against Scottish Provident over their refusal to pay out on an activities of daily life policy is set to appear on BBC documentary series Rip Off Britain highlighting his case and subsequent efforts to bring the issue to wider attention.
As first revealed by FTAdviser, in February, the Fos ordered insurer Scottish Provident to pay compensation to Chris Hargreaves after a two and a half-year battle over his income protection policy, which the firm had refused to pay out on saying that the terms had been “misunderstood”.
Mr Hargreaves was diagnosed with continued internal bleeding more than two years ago and claimed that he evidenced that he could not perform two of the six tasks listed in the policy.
However, the claim was refused by Scottish Provident in December 2009, with the firm saying that there was “no objective evidence” that Mr Hargreaves was ‘continuously’ unable to perform the tasks.
Responding to the Fos judgement, the company said that it would “abide by the decision of the ombudsman”, but that the case “highlighted an industry-wide issue around customer understanding of certain protection policies”.
The following month, Scottish Provident and Bright Grey launched a review to look into “substantially increasing” the number of jobs that are offered own occupation income protection cover.
Since winning the case, Mr Hargreaves has launched a campaign against ADL policies, calling for HM Treasury to ban these “fluffy definitions” in protection insurance policies. He wants to see the end of the sale of such policies.
He is set to appear on consumer programme Rip Off Britain on the BBC in September to discuss the case against such policies.
Mr Hargreaves told FTAdviser: “The program wanted to highlight not only the policies, my fight for a payout but also the success I’ve had in making it a debate and keeping it there with a lot of help from the media.”
Mr Hargreaves believe that insurers’ arguments are flawed when they say they have no choice but to offer these policies when friendly societies offer alternative own occupation policies to all policyholders.
Alan Lakey, partner at Highclere Financial Services and a protection expert, said: “In reality these policies do not do the job. Companies will promote these but in reality they are being deceitful as a good proportion of these claims do not go through. Chris has done a marvellous thing.”
However, the Association of British Insurers has previously defended the use of ADLs to FTAdviser.
Nick Kirwan, head of protection at the ABI, said: “No insurer wants to have definitions that are unclear; insurers want to make it clear to consumers what is covered by their policy.
“If insurers decided not to use activities-based definition, they wouldn’t be able to offer cover to people who aren’t in paid employment – homemakers for example.”