A financial ombudsman has found in favour of the Cirencester Friendly Society after a man complained that the mutual had not provided him with cover.
The complaint came from a man – known as Mr J – who asked his financial adviser to help him get income protection insurance.
However, the adviser was told by the society that because the client could not provide medical records from a UK doctor for the previous five years, it would not provide cover.
The man had lived in the Netherlands between 2001 and 2012 and claimed Cirencester Friendly Society’s decision contravened the EU principle of free movement.
This principle, laid out in the Free Movement of Citizens Directive (2004), allows citizens of member states to live and work in other EU countries without any restrictions.
However, the ombudsman Robert Short said: “This directive is primarily concerned with the removal of obstacles that deter an EU citizen from moving to and residing in another member state.
“So I don’t think there is anything in EU law generally which clearly suggests that Cirencester’s approach is inappropriate.”
He also said that Cirencester Friendly Society was not contravening the EU’s directive on the provision of services because insurance and financial services were excluded under this.
He said: “I do not think there is anything in EU law generally which clearly states that Cirencester’s approach is inappropriate. I am satisfied that Cirencester’s decision not to offer Mr J cover is a legitimate exercise of its commercial judgement.”
Mr Short added that, because the society’s criteria for accepting or rejecting applications for cover would apply to people living in the UK, adding: “I do not think its approach was completely arbitrary.”
| EU Directives |
2004 – Free Movement of Citizens Directive. This rules on the right of citizens of the union and their family members to move and reside freely within the territory of the member states. 2006 – Services Directive. This aims to facilitate freedom of establishment for providers and freedom of provision of services between member states. It also aims to increase the choice offered to recipients and improve the quality of services. Source: European Commission |
Right to reply
Paul Hudson, chief executive of Cirencester Friendly Society, said: “Cirencester is a mutual organisation owned by and run for its members. Protecting the interests of our members is paramount.
“The society applies a five-year UK GP rule for sound actuarial and commercial business reasons as a part of our approach to underwriting. We do not discriminate because it is universally applied to all applicants for the Income Assured Plus contract.”
