bank/insurance CI-ppi dispute/problem

pedro123456

Oct 1998 took out a business loan with RBS for £135,000 this was to be paid back over 15 yr interest only of £1200/month and an endowment policy of £600/month. As part of the endowment I was supposedly covered for Critical illness and disability cover with a 6 month deferment period.
This policy was sold to me by the Royal Bank of Scotland and it was with the Royal Scottish Assurance (their insurance company). The policy I was sold had “life cover, critical illness and “disability cover”.


November 2006 I had what I thought to be a “heart attack”. I had a cardiac arrest and had to be “jump started” back to life, I was in hospital for 3 week and eventually diagnosed with Cardiomyopathy.

Feb 2007 (approx) claimed under critical illness cover for a “heart attack” however the claim was disputed by RSA, I took their decision to the Financial Ombudsman.

In April 2007 I claimed for waiver of payments under disability cover as I had been unfit to work now for 6 month +, and had a further Drs Note for another 6 month.

I continued paying my £1200 interest payments and my £600 premiums, in the belief that once the disability claim was sorted and that they would refund those payments.

It was getting increasingly difficult to keep paying, the bank was constantly on my back to maintain interest payments. I told them that the RSA should be paying but they said I had to maintain payments until RSA had sorted it. I reminded the RBS that it was they who sold it me and that the RSA was part of the RBS………..and as such they should approach the RSA and sort it………..they made it clear that that was up to me.

The RSA gave no explanation for not paying my interest/premium payments under my disability cover the bank wanted their monthly interest and I was left with no choice to cash in my endowment in order to maintain payments. I therefore wrote to the RBS, they in turn wrote to the RSA.

The cash in value was approx £52,000 and over a period of 9½ years I had paid premiums of approx £65,000 so they made thousands out of me having to surrender.


It was now Oct 2007 I had been unfit for work for 11 month I had paid my interest/policy payments up to date.
My critical illness dispute was still with the ombudsman and there was no payments made by the RSA under my disability claim.



Oct 22nd 2007
Received a letter from the RSA

Dear Mr …………………

I am writing to you in reference to correspondence that we have received from the RBS on 22nd October 2007.

We have received a request from the bank to surrender your policy under Power of sale. As you can understand, the surrender of this policy would have an impact upon your ongoing Critical Illness and disability claims, as well as your complaint case which is currently being dealt with by the Financial Ombudsman Service. I wanted to make sure you were aware of the implications that surrendering your policy would have on these matters.

If you still wish to proceed with the surrender under the Power of Sale, please contact myself or any of our contact centre staff and let us know how you want to proceed. Alternatively you can write and inform us of you wishes.

Should you have queries etc etc.

Looking back I feel as though I have been bullied by the RBS/RSA almost as if one has knocked me down and the though it could kick me until I could take no more. They knew it was just a matter of time for me to be unable to make payments. They have kicked me from pillar to post and for the first time in my life found myself on anti-depressants in order to cope……………..well ive had enough of the bullying.

Is it legal that they can say in effect? “Right Mr ………… there will be some impact on your Critical illness dispute that is currently with the Ombudsman and there will also be some impact on your ongoing Disability claim if you surrender you endowment” how on earth am I supposed to keep paying £1800/month I had maintained payments for the last 11 month while ill.

It is now March 2009 I have not been able to pay my Interest payment to the bank (9 month arrears) and they are now commencing court proceeding for re possession. The RSA should have been making payments under my disability cover they have offered no explanation as to why they haven’t,

The Ombudsman found in favour of the RSA with regards to the Critical illness claim.

I have been unable to work since Nov 2006 and I am currently retired due ill health at 52 yr old.

I am now under the CAB who are looking into things and I am grateful for their input, however I fear that the legal aspect isn’t receiving any attention and that it may well have to be looked at in more depth, and that legal support will be needed sooner rather than later.


So with that said - have I any legal case against the RSA/RBS ?

Should I be consulting a solicitor? Does anyone know of a local (Derbyshire/south Yorkshire) who specialise in this type of problem?.
I have been on Law society web site not much help.
Where do I go from here?

dunstonh

Can a board guide move this to the correct forum please - Endowments and mortages. Its not a PPI case.
....

The Ombudsman found in favour of the RSA with regards to the Critical illness claim.

Which pretty much ends much hope of any chance of legal success as the FOS tend to follow the same processes as you would expect a court of law to follow on something like this. You give no details on this so it suggests that this is not your complaint.

If its the 6 months of payments under the waiver of contribution then you are wrong in your understanding. The insurance company take over the premiums after 6 months of illness but you do not get those 6 months back. That is the deferment period.

Based on what you say and the limited info you give, there doesnt appear to be any case to answer. This could be partly because you dont say what part of it you disagree with and want to fight. So, its hard to see what angle you have. Do you feel the rejection on the CI wasnt right or it is the waiver of contribution? Do you feel the FOS were wrong?

We need more to go on to understand what you are aiming for and want to achieve.

pedro123456

Its not that easy to explain but ......

The CI was applied for I disagreed I went to the FOS who found in favour of RSA......so end of story.....thats accepted.

Now I also had DISABILITY cover.....with a deferment period of 6 month.
So my impresssion is that after 6 month the RSA take over the interest payments (£1200) and the premium payments (£600).

Unwell November, So after being ill for 6 month (April) I applied for waiver of payments expecting the RSA to commence my payments, however they did not and have not paid any interest or premiums, i continued paying them myself (its these payment i thought i would get back) until i couldn't do so any more I paid upto Oct and I had to cash in my endowment to pay the banks interest payments.


Now the RBS are wanting to re posses my house.

The RSA gave no explination as to why they didn't pay interest/premiums in April.

p.s I wasnt sure where to post my initial enquiry

dunstonh

Can you confirm that it was the waiver of premium (sometimes called waiver of contribution) on the plan that you are talking about? If so, that only covers the endowment premium. Not the mortgage element.

Endowment policies couldnt include payment protection for the mortgage within them due to the packaging requirements. They could only include payment protection for themselves. To protect the mortgage you would have needed a standalone mortgage payment protection, payment protection or permanent health insurance plan.

pedro123456

Taken from RBS/RSA paper work.
Key features of the RSA morgage savings plan, putting you on the right road to peace of mind.

Life assurance is provided at a guarenteed minimun level throughout the policy term, the sum assured usually being equal to the amonut of your mortgage loan.........on death payment etc.

Critical illness.....Serious illness can strike any of us at any time- and it doesn't have to be diagnosed as terminal to mean the end of the road for many in terms of earning power and the ability to meet existing financial commitments. This is why we offer the option of including CI cover in your policy, to the payment of lumo sum etc.......includes Heart attack/stokes etc.............i ended up with CI cover..and yes prossibly mis-sold as it was suggested that it was part of the poan arrangment.

Disability cover....If the disability cover option is selected (and it was 6 month deferment ) at the start of the plan and you are later unable to work due to illness or injury your policy , both your policy premiums and mortgage interest may be paid after a deferment period 6 or 12 month (selected at onset).....it was selected at the onset.

If you want to include CI in your plan this must be done on the onset as cannot be added later in the policy terms etc..it was done at the onset.

This all singing all dancing policy was possibly pushed on to me......I recall it almost being part of the lending process..................the RSA should have been paying after the 6 month period, I have been unfit for work for 2 and 1/2 years now................they havent paid a penny or explained why they haven't paid................

Its simple to me.................I was ill in November, unable to work since I sent them Sick notes fron GP............I maintain both interest/policy payment throughout and for months after (nearly a year) my illness they should have taken on payments until such times that i was able to work again or the maturity date of the policy.

or am i missing something...........like they please themselves if they pay or not.

pedro123456

Oh and as for the waiver of payment etc.........when I rang the RSA in April and explained I was looking at the disability cover and wanting to claim, the girl on the phone said "you mean the waiver of payment i will sent you one out.....she sent it i filled and returned it.

All part of my paperwork state both Interest payments AND policy premiunms would be covered....................thanks

dunstonh

ended up with CI cover..and yes prossibly mis-sold as it was suggested that it was part of the poan arrangment.

That may have been how it was presented to you verbally. However, typically the sale of the regulated product would have been done by someone else and they would have written a factfind and suitability letter justifying the recommendation on grounds of no cover and having a financial need. Paper evidence tends to trump verbal evidence as in reality, you can say whatever you like about what happened (as can they).

both your policy premiums and mortgage interest may be paid after a deferment period 6 or 12 month (selected at onset).....it was selected at the onset.

Thats a strange one as waiver of premium was only designed to pay the insurance premiums. I wonder now if this is a segmented policy with an income protection segment as well as the life and CI segments (and waiver).

The decision on the CI side should have no impact on the income protection/waiver side as its effectively another claim on a different part of the plan. They are taking far too long. Its a shame you didnt use an IFA as they would be doing this pushing for you and of course it is in the interests of the IFA to get the policy to pay out. The sales rep for RSA is employed by the insurer so has a conflict there.

I think you need to raise a new complaint on how long the income protection side is taking as it shouldnt take more than a few months.