Aviva Medios Healthcare - are we being treated fairly?

fsLegal

Comments below continue to be opinion and not advice and any presented facts are subject to verification.

Available Remedies
In a Court of Law the following would govern the remedies available to complainants:
Actual contract breaches committed by Aviva.
The Anticipatory breach (re New Entrants) that renders the Guaranty incapable of performance.
Damages are the basic remedy and can be claimed for both types of breach; their purpose being to put claimants into the same financial position as if their contracts had been properly performed.
Also a contract can be treated as discharged if so required, as the breaches are fundamental.
If damages are not an adequate remedy, then equitable remedies may be awarded for specific performance (of a positive contractual obligation) and injunction (performance of a negative obligation).
With respect to Aviva’s repeated misrepresentations, the Misrepresentation Act 1967 grants extensive rights that include damages, rescission and avoidance of certain contractual provisions.

As for the Ombudsman, its focus is upon putting things right and it can presently make awards of up to £150,000.
There is no other restriction on FOS telling Aviva what it must do to put things right for the consumer.
Its powers are set out in the Financial Services and Markets Act 2000 and include “money awards” and “directions”, and its decisions are “legally enforceable” in Court.

The FCA was specifically asked to act under the Unfair Terms in Consumer Contracts Regulations 1999, with the objective of reversing Aviva’s wrongful changes.
Such action can be time-consuming and expensive if defended or if the firm is uncooperative.
As a consequence, the much easier Ombudsman process might be encouraged through the Memoranda of Understanding that exists between the FCA and FOS. This could have been the aim of prime Posters on this site and it is noted, though not necessarily connected, that FOS reversed its decision-making in mid-course.
Any FOS decision-making could still be followed by FSA action that could cover ‘punishment’ for Rulebook non-compliance, investigation costs and so forth.

Compensation Form
Complainants might seek any of the following remedies.

1. Damages:
The wrongly removed Guaranty will cause extra actual cost to policyholders for alternative insurance cover in the event their contract with Aviva is determined. That extra cost constitutes the damages and loss suffered. Premiums and Excesses overcharged will add to claim entitlements.

2. Reversal of Aviva’s wrongful contract changes:
Reversing contract changes would put claimants back to their original positions to the extent that is possible. However, that cannot be achieved for New Entrants and, consequently, the same premium protection cannot be provided. Resolve can be achieved through creating some satisfactory replacement mechanism. For example that could be to limit all future premium increases to medical inflation (part of existing provisions). The resolve for Premiums and Excesses overcharged could be as set out above, under Damages. Protection might also be granted against damages’ claw-back by Aviva through the maintenance of existing benefits and other provisions.

3. Damages and ongoing Aviva cover for risks uninsurable with alternative providers:
This is a mix of the above 2 remedies and might be sought by policyholders that suffered illnesses during the course of their Aviva policy term, where damages cannot provide adequate remedy if cover from alternative providers is only available on a restricted or special basis. In particular, that problem could have arisen due to claimants being denied non-restricted, standard alternatives because of Aviva’s repeated Misrepresentations and so forth. Damages compensation for the wrongly removed Guaranty could be claimed as in the above Damages paragraph. Cover from Aviva for relevant illnesses could be claimed and provided at no cost by an ongoing Aviva policy, such as set out in the paragraph headed ‘Reversal of Aviva’s wrongful contract changes’. The resolve for Premiums and Excesses overcharged could also be as above.

All the above could fall within relevant available remedies available to the Court or FOS.

Compensation Amount
In criminal law, sentencing reflects the heinousness of the crime and its admittance or denial.
In the regulation of financial services, the FCA has extensive disciplinary, criminal and civil powers that can be applied for failure to meet its requirements.

Civil Courts and FOS are not concerned with punishment.
Whether or not defences are spurious or without base has no impact upon awards.
Consequently, the immediacy of winning can demote parties’ reputations to an after-thought, albeit one that can be potentially explosive and catastrophic.
Compensation is solely intended to resolve the complainant’s loss or for FOS’s purpose “to put things right”.

Explanation of how to value protection against Age-Related Premium increases is provided within the Association of British Insurer’s publication ‘Are you Buying Private Medical Insurance? 2012’
- this can be found on the following web page (insert normal www. prefix)
abi.org.uk/Information/Consumers/Health_and_Protection/Private_Medical_Insurance.aspx
It demonstrates the enormity of the premium increase for a 70 year old, as the premium is around 3 times greater than that for a 35 year old. The publication includes a graph of ‘Comparative price by age’.

Either information from this ABI publication or quotations from organisations such as BUPA and AXA can be used to calculate loss when applied to a complainant’s average life expectancy (also available on internet).
The £70,000 loss, referred to in a preceding Post, would be applicable to an insured couple paying net annual premiums of around £3,000 + who are aged in their early sixties. For a younger insured couple (paying such a premium) the compensation should be greater than £70,000 and if older less than £70,000. All these amounts are relevant for the purpose of Compensations Forms 1 and 3 above.

Irrespective of whether Aviva pays out compensation directly or through continuing policies, there will be substantial cost as full provision is required in Aviva’s accounts for this liability, and there will also be a knock-on effect with respect to additional capital. However, continuing policies would have several advantages for Aviva in that immediate major cash outgoings would be avoided; cost would be wholesale rather than retail price based; servicing and underwriting income would continue; and Aviva would best avoid business spiralling below minimum levels of viability. Consequently, these benefits could mitigate the cost of extra protections required by continuing policyholders as, clearly, Aviva has caused a breakdown in necessary trust and disregarding that would oppress those policyholders.

Overpaid Premiums and Excesses from 2009 onwards are more straightforward calculations and can be derived from policyholders’ Premium Request Notices. If compensation is sought from 2009 onwards then that should also be relevant for age determination when calculating compensation for the wrongly removed Guaranties.

PMW2012

Many of us have received a holding letter from the FOS adjudicator recently and I took the opportunity to speak to the FOS offices today.
I have had a number of conversations with their offices more recently having been involved with this product as broker/policyholder/claimant and with over 40 years in the business and, as I thought, the letter issued is as they have not received a satisfactory response to this case requested by the FOS deadline of mid April so they have had to write back to them.
I am aware that my own case is being used by the FOS "as a lead case" as I have been trying to present the position not just personally but also with my knowledge of the original marketing of the product in which I was involved as a broker at the time.
The FOS are, by the way, keeping a close watch on this website which has proved invaluable in ensuring all issues are dealt with and in my mind these include the following matters that apply to all policyholders in addition to any personal grypes.

1. maintenance of the original terms of the contract regarding lifetime cover

2.Pricing to only increase by medical inflation each year.
In this respect they should not be allowed to rate this on the remaining portfolio experience as Aviva have suggested to me as any portfolio in run off is bound to have a deteriorating experience. This can easily be solved by Aviva as the total number of lives covered (known to the broker industry)represents less than 1% of their entire portfolio. Indeed I have suggested this to them in my earlier correspondence because of my knowledge of the industry and I can tell you I have never yet known any underwriter or actuary who has been 99% correct!

3.A refund for the overcharging that took place at the beginning of 2012 of 12% and consequent adjustment to subsequent renewals.

Obviously if this type of solution is not forthcoming the alternative of obtaining a lump sum compensation payment as an alternative would seem reasonable.

I am advised by the adjudicator that once a suitable reply has been received from Aviva that this will be put to the complainant for consideration and if agreement cannot be reached then the FOS will make a decision that Aviva should comply with.

I encourage everyone to keep up the pressure and anyone who has not yet submitted their complaint to get it done as soon as possible.

BakerA

In putting forward views to FOS, it is essential to state policyholders' need for ongoing lifetime available cover that includes effective protection against Age-Related Premium Increases and against Aviva misbehaviour (whether past, present or future).

Interrupting ongoing treatments could have life or death consequences for policyholders with grievous illnesses.
Relevant alternative cover might not also be available to them.
Nor might alternative cover be available for those aged over 70.
Yet they all contracted and paid for protected lifetime cover - not some Micky Mouse policy that diminishes or vanishes whenever that suits Aviva's purse.

We now know the policy has been closed-off through 2013's newly introduced restriction to stop the addition of new members to existing policies.
Never mind such change breaches Aviva's unconditional Guaranty commitment on New Entrants!
Never mind the breach of that same obligation more than 3 years earlier!!
I suppose we must be grateful that this latest breach wasn't covered-up by repeated misrepresentation, as occurred with the breach of some 3 years earlier!!!
The outlandishness and brazenness of Aviva's misbehaviour, in ignoring contractual obligations and making-up what suits, defy all and any comprehension!!!!

Aviva's 2013 alterations 'set in concrete' the improper curtailment of what was a previously unconditional Guaranty commitment.
Never mind that Aviva had no right to make that or earlier fundamental policy changes.

Equity, fairness and the obvious need to put matters right, all demand that policyholders' protections are similarly 'set in concrete' - especially the reversal of improper policy changes and effective protections against the further attrition of policyholder rights and benefits.
That runaway rogue, Aviva, has got to be stopped from recreating and otherwise diminishing its contractual obligations at will.

My reason for entering the fray is a reaction to PMW2012's above statement that he is a lead complainant, able to comment upon FOS's decision, but willing to accept cash compensation.
Whilst Aviva's treachery and untrustworthiness undoubtedly give him that right, it must also be mandatory for sick, old or other policyholders to be provided with the opportunity to continue the contracted lifetime available cover, with the support of adequate and meaningful protections.
Aviva cannot be allowed to walk away from its obligation to make available lifetime cover, which can only be basic, undeniable common sense.

I hope PMW2012 will look after the interests of others.
I also hope he takes the above onboard.
I guess he will ally himself with others on this site that seem to possess immense experience in corporate and legal areas in addition to insurance industry expertise.
For instance, they will know that regulating a matter such as medical inflation needs to be achieved through Aviva's enforced adoption of the average of charges made by the 2 top insurers - as Aviva has proved it cannot be relied upon to be anything other than self-serving.

Aviva's torturing of policyholders must be stopped.

My thanks are to the Posters on this site who have scoured Aviva's documentation and uncovered its vile misbehaviour, as otherwise we would never have known about Aviva's heinous actions before it was too late.

davidstone

It has been previously pointed out that Aviva surreptitiously changed a definition within 2013’s Policy Schedule in order to cover-up its untruth that our aging policies were 12 month contracts.

Now, BakerA rightly points out that Aviva’s 2013 Terms improperly stop the addition of New Members to existing policies.
Added to that is a policy transfer restriction.
Unfortunately, that does not exhaust 2013’s improper changes, to which one more must be added.

Policyholders were informed in 2013’s Terms that “You will not be able to make any amendments to your policy, for example, adding or removing the excess”.
Only exasperation and the continuous lengthening of the FOS process stopped immediate reaction.
But plainly the heading of “Changes to conditions” gave all away as Aviva had authority to change solely standard terms prior to it acting improperly.

If policyholders refer back to Aviva’s 2001 Policy (the first issued following the transfer to OHRA), they will see that Excess Options are a unique policy obligation, set out in the Policy’s Key Features Section. Subsequent documentation makes clear that the Excess chosen can be amended.
There are also other related matters covered by this improper change that are similarly affected.

Besides Aviva again improperly and unilaterally changing fundamental parts of our contract, one discerns the Aviva intent is bent on removing all flexibility within the policy.
The obvious purpose is to make sure the policy cannot adapt to changing circumstances and, in that way, drive policyholders away and, more particularly, enable Aviva to avoid its liabilities.
Dishonest that might be but that’s nothing new to the Aviva crusade of casting-off its liabilities, whether that be by ‘hook or crook’.

As for the delay in Aviva’s response to FOS, no answer was ever going to be given prior to Aviva’s Annual General Meeting on 9th May.
Its directors and new CEO were already fighting-off shareholder accusations that they were more interested in their own remuneration rather than managing a business with £3billion of losses.
Just one more piece of simultaneous bad news and the probability of merger partners being forced upon Aviva would have been greatly increased!
Consequently, procrastination and delay must come as no surprise, especially considered against Aviva’s previous contempt for FOS and the FCA when it lied to a Government Minister to pervert the investigation process.

One just gasps at the sheer arrogance and omnipotence of this ubiquitous Aviva.
Even when Aviva knows it’s under the spotlight, that doesn’t arrest its mal-behaviour.
Aviva’s disgraceful behaviour just continues to take one’s breath away!

PMW2012

I refer to ABaker's post 124 above.
Can I clarify that my case is being used as "A" lead case so not the only one being put forward by a long way.
You will also note that the first key point I mention is "maintaining LIFETIME cover on original terms."
With ref to taking cash as an alternative my comment here is in respect of some policyholders apparent desire to be offered this and obviously that may be what some policyholders would prefer.
It is certainly not something I would be seeking and with amounts of £70000 being bandied around as being the sort of compensation they would be looking for I just cannot see AVIVA being very keen on adopting this route given the tightening up going on in the company at present following a reduction in dividends of about 40% I believe!

fsLegal

I have been inundated with worries concerning the challenge of putting things right.
That’s because Aviva has misbehaved and misled over so many years.
However, those worries are unfounded.
Again my comments are opinion and not advice and any presented facts are subject to verification.

Within continuing policies there would need to be repetition of the policy’s Key Features, together with a statement that such provisions are unchangeable and take priority over all past, present and future attaching Terms and Conditions.

Additional wording would be required for the following:

- replacement mechanism for New Entrants due to that breach being impossible to remedy through words alone, especially because of the inability and/or lack of will to resurrect a withdrawn product in the marketplace;
(that replacement mechanism could be the previously mentioned restriction on premium increases to medical inflation as determined by the average of increases made by top 2 medical insurers for their best selling private medical cover policies); and

- any need for added clarity, such as for changing Excesses where old provisions would be reintroduced (again such reintroduced provision would be unchangeable and take priority over other Terms and Conditions).

The remaining vital requirement would be for the power to alter the policy to be limited to Standard Terms, as originally committed to by Aviva.

Continuing policyholders might give up their right to damages for breaches of Key Feature’s obligations and for related misrepresentations in return for the above and for protection of existing benefits and rights for the remainder of their policy terms
(save their rights to compensation for overpaid premiums and excesses, distress, inconvenience, interest and so forth would remain and require compensation).
Recognition of the reality of the New Entrants’ situation might also lead to some compromise with respect to Member changes for continuing existing policies.

Discontinuing policyholders would receive damages for breaches of Key Feature’s obligations and for related misrepresentations, overpaid premiums and excesses, distress, inconvenience, interest and so forth, and the manner in which such claims could be dealt with is set out in a prior Post.

When it comes to responses to Ombudsman’s views, certain Posters seem more than capable of that as they have demonstrated an abundance of expertise. That same expertise, combined with expenditure of considerable time and effort, has already led to Aviva being found-out and there is no sign of those same Posters letting-up. That does not change the fact that Aviva has caused its own downfall through persistent wrongdoing and mismanagement, unrestrained greed, and an absence of moral compass.

how_2

Yet another Aviva wrongdoing is uncovered that more than rivals its previous misdeeds.

Aviva just does what it wants irrespective of rules, obligations or any recognisable standard of behaviour.

Following FOS’s review, ongoing policies must be given maximum safeguards if any reliance is to be placed upon them.

Details of this ultimate betrayal will be provided by another policyholder prior to midnight on Thursday, 30th May.

Lawton

Yet another wrongdoing by Aviva is uncovered that rivals all previous ones.
Davidstone omitted it from his 13th May Post to facilitate any investigation by the Financial Conduct Authority (formerly Financial Services Authority).

The following is an extract from a complaint that was received by the Financial Conduct Authority (FCA) on 20th May 2013.


“A major challenge that confronted Aviva was its desire to change the policy’s Key Features. Its latest need was to:
1. stop the option to choose an Excess as well as any other option, and
2. restrict the addition of new members to existing policies, together with related restrictions.
As these matters form part of the policy’s Key Features, Aviva presented them as Condition Changes (ie terms going to the root of the Contract and, therefore, fundamental between Insurer and Insured). Putting aside the wrongful change of the policy’s Key Features, such changes were identified and explanations given in accordance with ICOBS 6.4.11.

Removal of flexibility attaching to the policy ensured changes in policyholder circumstances could not be satisfied, an essential requirement for any long term policy. That was crucial to Aviva’s continuous dismemberment of the policy’s Key Features, clause by clause until nothing significant remained. The intent was, and remains, to drive policyholders away from their policies and relieve them of the value of their Guaranties, thus allowing Aviva to jettison its liabilities.

Next is the really heinous part of this Aviva crusade. The above overt presentation demanded a seamless process. Consequently, Aviva falsely stated in its Terms & Conditions that “We may change the terms and conditions of the Policy at the Review Date”, a power never previously held by Aviva. Unsurprisingly, whilst other changes were identified and explained in Aviva’s guide to 2013’s changes that was not the case for this crucial ultra vires extension of Aviva’s power to alter the policy. Even if policyholders were able to pick-out this wording, from 2013’s extensive documentation, they would have needed to refer to 2012’s Terms and Conditions to realise any change had been made; those 2012 Terms & Conditions stated “We may alter any of the terms of this Policy at any Review Date” - the anomaly being there was no authority to alter Conditions.

It was even more important for Aviva to deceive with a false seamless process because of the history attaching to the power to alter the policy. That was because Aviva did not even have the power to change “all terms”, as it had misled on and similarly falsified that power in its 2003 Premium Review. The reality was that Aviva only had the power to “alter standard terms” which was granted and stated in 2001’s full policy documentation. Moreover, Aviva knew that granting itself ultra vires power was one of the main complaints policyholders had made to FOS; consequently, the need to deceive and conceal this latest falsification was that much greater. Even worse, Aviva knew that it had not granted itself the power to change conditions prior to 2013 but that it had, nevertheless, changed the policy’s main Key Features for 2006 and 2010 onwards – effectively, Aviva’s falsified extended authority confirmed its previous guilt.

In falsifying power it did not possess, Aviva’s efforts to present a seamless process and to avoid scrutiny meant it failed to comply with the FCA’s following Rulebook obligations:
- to conduct its business with integrity (Principle 1);
- to pay due regard to the interests of its customers and treat them fairly (Principle 6 and related Outcomes 1, 3, 5, and 6);
- pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading (Principle 7 and ICOBS 6.4.11); and
- must manage conflicts of interest fairly (Principle 8).
One must expect Principle 11 was also not complied with, assuming relationship obligations between the FCA and Aviva were performed.”


The above dishonesty and deceitfulness demonstrates that policyholders must be given maximum safeguards if any reliance is to be placed upon ongoing policies. For that purpose, FOS was also informed about this further incredible misbehaviour at around the same time as the above complaint was made to the FCA.

Explanatory notes:
1. The improper changes made by Aviva in 2006 and 2010 were respectively (a) the removal of lifetime available cover and (b) the stopping of New Entrants.
2. The FCA Rulebook obligations not complied with by Aviva included
(a) Principles, which are general statements of fundamental obligations placed upon regulated organisations by the regulatory system. The ones not complied with by Aviva represent some 45% of all Principles.
(b) Outcomes required under the Treating Customers Fairly Principle explain what is sought for consumers and are central to delivery of the retail regulatory agenda for an efficient and effective market. Aviva failed to comply with some 66% of those required Outcomes.
(c) The Rule on information disclosure for changes, ICOBS 6.4.11, was not complied with as the ultra vires change to Aviva’s Power in its 2013 Terms was effectively concealed instead of identified and explained. The Rule governing changes that can be made, ICOBS 6.4.12, was also not complied with as the change to Aviva’s Power was (i) neither fair under the Unfair Terms Regulations, Schedule 2 clause 1(k), nor (ii) compatible with the original policy.

Maytops

I thought it might be helpful to post an update I have received from the Financial Ombudsman on May 1:

I can confirm that following an ombudsman's initial review of the Medios complaints, we were directed to issue a view to Aviva on a different case to your own. While the assessment was based on that individual complainants' concerns, it was generally concluded that the current terms for the Medios policies do not reasonably allow it to increase the premiums in the way it did. That is the increase in relation to the guaranteed loyalty bonus.

It was also considered that Aviva failed to act appropriately when notifying about the increase to the premiums, so that the individual policyholder was not in a position to make a fully informed decision about their cover.

Aviva has disputed this view and considers it has acted within the terms and conditions. It has submitted further evidence to support its position and we are currently in the process of reviewing this.

Due to the number of cases we have received regarding this issue we are carefully reviewing our position before finalising any recommendations to Aviva. However, we are progressing these complaints and hopefully we should be able to provide a clearer response to you within the next few months.

Jean819

Thanks Maytops for your update.

Please can you clear up confusion stemming from you saying your FOS update was received on 1 May. Am wondering whether you mean 1 June as PMW2012 reported on 7 May that FOS “have not received a satisfactory response to this case”? We also learnt subsequently from Davidson that Aviva needed to avoid any adverse substantive news hitting the public arena prior to its 9 May, Annual General Meeting.

It might be helpful for you to note that FOS will only deal with ‘what you complain about’, as it seems you might not have followed Paulson’s suggestion to consider your other losses - which are some 70 times larger than the premium overcharge.

As for FOS’ update comment on Aviva’s failure “to act appropriately when notifying about the increase to the premiums”, it would be interesting if you could discover which of the many different responses Aviva proffered is being criticised by FOS. Even better if you can find out why policyholders were told to pay for the Aviva breach of its New Entrants’ obligation that caused the greater risk and, therefore, greater cost of an older age group.

We all note that Davidstone was proved right, in his 9 April Post, to expect further mischief - seemingly in the form of "further evidence". As Lawton has already showed in his 30 May Post, that Aviva mischief never stopped and the continuing problem is that it never will as Aviva can no longer tell right from wrong.