The decision, announced today (2 February), means that the client, Chris Hargreaves, will be paid from the beginning of his claim from 21 July 2009 to 19 September 2009, as well as for the period from 20 September 2009 to 31 January 2010.
Interest should be added to the payment made at the gross rate of eight per cent per year from the date the claim was resubmitted to the date of settlement, the Fos ordered. Scottish Provident have also been told to pay Mr Hargreaves £100 compensation for the “distress and inconvenience” caused.
Scottish Provident had previously refused to pay out on Mr Hargreaves’ income protection policy, despite doctors confirming that Mr Hargreaves is unable to work, claiming that the terms of his policy have been misunderstood.
Responding to today’s 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”.
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.
Mr Hargreaves said that he was unable to walk 200 metres on a level surface with a stick or other aid without discomfort, nor was he able to pick up a 1kg weight from table height and carry it for 5 meters, claims that were confirmed by medical consultants.
He submitted a claim in September 2009, which would have paid out at a rate of £8,400pa until his policy expired in July 2010.
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.
The insurer added that insufficient evidence had been provided by doctors as to his inability to perform the tasks stated, specifically stating that there was no explanation of why the tasks were not achievable.
In July 2010, the case was sent to the Fos, which initially agreed with the firm that there was not enough evidence. The Ombudsman later referred the case back to the insurer after receiving additional material from Mr Hargreaves.
