Aviva Medios Healthcare - are we being treated fairly?

Latimer

We all share mwng's anger.

FOS messed up badly in following Mr D's pre-occupation for a lapsed OHRA policy and consequently let us down badly. As its world is one of unchallengeable power, any retraction of the Mr D decision was always an uphill struggle.

Hopefully, doing what the system requires will yield us the best chance of justice.

mwng

These are all fine words, guys, but that is all they are.
Has anyone got sensible CONCRETE proposals for a way forward?

AdamsP_2

mwng, you missed 'the burtwood boat'. Action has been taken. Whether it achieves anything is something else but it was clearly the best way forward.

burtwood also dealt with other scenarios and cannot see that anything has changed unless you can show us otherwise.

alanjg1

I've had my complaint reviewed by the Ombudsman and to keep things brief, they have upheld their earlier decision and award of around £700.

The Ombudsman has found that Aviva are only 'guilty' of failing to give adequate explanation of the reasons for the premium increase.

I have about another week to decide whether to accept the findings and be bound by it or to reject it and be free to pursue it further through the courts or otherwise.

I am wondering if I accept it, will that exclude me from any further action taken via the FSA.

I'm sure others have had the same review result.

Any opinions from the experts on here will be welcome either as a post or a PM.

What to do? Decisions, decisions!!

davidstone

We now have to consider what to do with our policy for 2015 – that gives us some 8 months to consider the matter assuming the worst occurs due to us not getting any help from the FCA.

Aviva no longer has guarantee costs to worry about following the FOS decision. Its Guarantee was and is worthless and a total con trick. It was mis-selling at its very worst from 2001 onwards. Aviva’s objective will be to retain profitable business. That will also be the same for advisers, who benefit from whatever action we take – although they claim they were equally conned by Aviva. However, those advisers still want to do business with Aviva as it makes them money – including the money we have been tricked and conned into parting with.

For Medios Healthcare policyholders, premiums for a married couple in their sixties will be approaching £7,000 if they both claim, due to an excess approaching £1,500 for each of them. That equates to some of the most expensive policies on the market. Equally, their Medios Healthcare policies are totally inflexible whilst other available policies offer complete flexibility. So unless they have large ongoing claims they could conclude that they would be crazy to remain.

For Medios Optional policyholders (like Mr D), a married couple in their sixties have been paying annual premiums around £2,500 and have no excess. Good luck to them as long as that continues under Aviva’s future regime – although the subsidy from Healthcare policyholders will disappear as fast as Aviva is likely to push their premiums upwards.

As for Aviva’s future regime, I will share with you some Aviva comments made to FOS which we have now been able to obtain indirectly. Some of it is scary but policyholders have a right to know even if it might have been intended to mislead FOS.

- “the resulting analysis (for 2012’s premium increase) recognised that to ensure the sustainability of the product a 52% increase in premium was required. We took the decision not to increase premiums by more than 20%, in the best interests of customers”,

- “in reality, as we note in your (FOS’s) letter, the terms and conditions (the ‘inherited’ OHRA Article 8 authority) would allow us to stop providing the GLB (the Guaranteed Loyalty Bonus). Equally we could decide to close Medios to renewals”,

- “we saw considerable lapses from our Medios portfolio after the 20% premium increase (24% lapse vs. an average of 9% over the last 5 years)”,

- the complained about performance for the period to 31st December 2011 showed constant annual underwriting profit of almost £300,000 or more except for 2009 when there was a loss of some £370,000 (this performance was despite the stated 9% annual business loss that followed premium rises for previously declared medical inflation),

- “There is no basis for recommending that premiums increase only in line with medical inflation in the future”,

- “there is no requirement anywhere in the terms and conditions of the policy or in law for Aviva to offer a ‘comparable product’ should we choose not to sell this annual product in any given year”.

All those comments were premised upon there having been no Age-Related Premium Increase.

However, that all changed with the Mr G decision from a second ombudsman as Age-Related increases were then approved when he gave them the green light with the following comments:

- “she (the ombudsman that made the Mr D decision) concluded that Aviva was not obliged to maintain the original terms and conditions” and “I agree with this assessment”,

- “I consider it (Aviva) was able to take into account other factors (besides medical inflation), including the cost of claims, when setting premiums”

- “Aviva has explained that the sharp increase in 2012 was because of historical under-pricing of premiums. I appreciate that this would be deeply disappointing to policyholders and raises questions about Aviva’s management of the scheme .... In terms of our role, I note the premium increase was imposed at the same rate across all age-bands. I am therefore satisfied that it did not breach the terms of the guarantee .... the setting of premiums is a matter for the insurer’s commercial judgement with which we would not normally interfere.”

It is reasonable to ask whether the second ombudsman even read the Sakagawea presentation as according to FOS it was not submitted until Thursday, 27 March and the ombudsman sent his 8 page decision to our Sekagawea presenter on Monday, 31 March. Obviously, this ombudsman was a quick reader of a 70+ page presentation with over 70 attachments of supporting evidence as well as being the fastest letter composer and writer ever! However, it does not matter that this second ombudsman could not even get his facts correct when stating the OHRA Article 8 Authority had been removed in 2003 as he had obviously not even bothered to look at Aviva’s 2001 Offer documentation. Nor does it matter that he therefore entirely missed that the 2001 Offer authority to alter the policy was limited to changing standard terms. That is the sad truth as these ombudsman decisions are fact irrespective of them being nonsensical rough justice of the sort meted out by some unregulated cowboy system.

Unless one is part way through a substantive claim or a privileged holder of a PRESENTLY competitively priced Optional policy (like Mr D) you might conclude that you need to run away from this policy and from Aviva as fast as you can. THE POLICY IS TOXIC.

Without doubt, all policyholders will conclude that the policy should never have been sold in the first place – a huge mis-selling scandal considering the amounts of money involved and the some 25,000 policyholders affected since 2001. Charging for a Guarantee that protected against increasing claims from old age and then knowingly charging a second time for those same increasing claims as and when they occur is an effrontery to and mockery of any regulated system.

In response to alanjg1’s question, it is unknown whether accepting Aviva’s compensation will preclude him from the benefit of any FCA action. Whether the FCA is going to act is also an unknown. However, we should know by the end of the year what the FCA will or will not do. Decisions, decisions ...

As for pmq, he will need to wait until after the Regulator (the FCA) has determined what to do. That is the effect of FOS's actions when it said premium pricing is a Scheme management matter and professed ignorance on how the Scheme operated for new members. Doubtless FOS's obvious messing-up on Aviva's authority to alter the policy will be caught-up in any review. Policy mis-selling is likely to be an even more important focus. As has been said in an earlier post, this second ombudsman will not be on the FCA's Christmas Card list!

pmq

Thanks to davidstone for that comprehensive post.

One particular comment - I would like to read the Sakagawea presentation or at least a summary of it (and would have liked to have read it somewhat earlier) , but seemingly "we" are not allowed to do so!

Barry_Man

Just for the record, I have a Medios Executive Plus policy (and so NO age related increases). I'm not to sure how many others on here have the same (or Medios Optional, which I believe has the same characteristic). I get the impression that most have Medios Healthcare (which allowed one age-related increase). Also, since the since the recent policy changes I have zero excess.

One of the issues that has existed (at least as far as I have been concerned) all along has been the dearth of historic documentation. I managed to get Aviva policy documents (from Aviva) going back to October 2002 (which came in to effect in January 2003). Other than that, one poster here sent me some old OHRA policy documentation (seemingly for the then equivalent of the Medios Healthcare).

I have to say that it had not been apparent to me until recent posts (criticising Mr D's approach) that some were trying to base their complaints upon Aviva documentation without reference to the earlier OHRA documentation. Especially as I was under the impression that most (if not all) policyholders dated from pre-Aviva days.

Indeed, one of the observations that I would would make about the postings on this thread is the number of claims and statements made by so many posters which were not backed up by any material evidence along with a general lack of clarity. Reading through the posts, much of it comes over as hearsay upon hearsay. Posters claim to know this or have found out that, but little, if any, substance to back it up is presented. To be quite blunt there has been plenty of incoherency along with a lack of objectivity.

Indeed, on a number of occasions I have asked other posters (often via PMs) to supply me with some substance to back up their words in the forum. In the main (there have been two notable exceptions), if anything has arrived it has, to be quite frank, been laughable.

To illustrate, at one point I asked for details of the Sakagawea arguments. It all came over as very hush hush, nudge nudge, wink wink, smoke and mirrors. I can see no justification for not publishing the arguments as (as I said at the time), if the arguments have been put to FOS they will have been made available to Aviva (e.g. for them to respond to).

For my own part, this whole issue has boiled down to three things.

1. Does Aviva have any right to cease to offer this policy?

2. Are the base premiums (i.e. for New Entrants) constrained (in terms of any increases) in some way (e.g. to medical inflation)?

3. Has the Guaranteed Loyalty Bonus regime been breached in some way?

There certainly seems to be some merit to the arguments against the first point given the wording of certain OHRA marketing materials and the Aviva statement “This cover can be continued for life”. I find it profoundly disturbing that, in spite of the wording changes and FOS's view that the policy is “clearly an annually renewable policy”. FOS completely side steps the whole issue by merely stating that as Aviva have not [yet] withdrawn the policy:- “this is not a matter about which I need concern myself in this decision”. This is perverse in the extreme.

As for the second point, I have seen absolutely nothing that can add any weight. I wish that it were otherwise.

Again, to illustrate, I received a package of information from one poster in which a letter from him to FOS stated “According to the original contract, medical inflation is the only increase that can be applied to the premium”. Yet the very documentation that the poster supplied me with made no mention of medical inflation. When I queried this, the poster remained silent!

Indeed, it is normal commercial practice for insurers to 'manage their book' (e.g. attempt to increase / decrease the number of policies [in this case new policies] for any given product / market sector) by pushing premiums down / up. Therefore allowing New Entrants (on paper) would not guarantee that the premiums would be competitive (for New Entrants or, by direct linking to New Entrant premiums, existing policyholders).

This then leaves us with the Guaranteed Loyalty Bonus (GLB). I don't think that anyone is claiming that the mechanics (as stated in the policy) of the GLB have been directly misused. Rather, that it has been undermined via a back door route. For FOS to state “In my opinion, the closure of the scheme to new entrants did not necessarily mean that the guarantee was fundamentally undermined. It is true that the average cost of claims per policyholder would thereafter be expected to rise year on year as the membership aged. However, this increased cost might have been met by reserves built up through the payments made by scheme members in the early years of their policy. Therefore, without knowing how the scheme was intended to operate, I cannot say that the closure of the scheme to new entrants necessarily meant that the guarantee was fundamentally undermined.” is at least incompetence and possibly malfeasance on the part of FOS as, surely, FOS should have investigated how the scheme operated given the issues that were raised?

This whole aspect of the GLB is only relevant if (as I believe is the case) medical inflation is not a characteristic of the policy (as discussed above). If the policy premiums were subject to the medical inflation constraint then the premiums could never have risen in the way that they have and the GLB issue would (surely) never have seen the light of day.

But, in any event (unless anyone has material documentation that proves otherwise), given the lack of any constraint to be within medical inflation, there never was anything to stop the insurer increasing the premiums for what it saw as normal commercial practice (see above). The only argument then is whether such increase might, arguably, be Age Related. But there was never anything to stop Aviva from increasing the premiums for any other commercial reason anyhow.

In conclusion, I would say that I have not seen anything that I believe would have caused FOS to come to a different conclusion. Don't get me wrong, I am not happy with their conclusion. But I have seen nothing from anyone on this thread that appears to be a basis for FOS to have come to a different view given the mindset that FOS have approached this (quite probably with Aviva's steering hand). I just don't see that they would ever have concluded in our favour.

Adamson_2

For the first time comments on this Forum have made me laugh.

For someone that admits to not having key documents Barry Man says a lot. Maybe that’s from the frustration of not getting others to supply what he is missing.

Barry Man’s thinking that one company’s terms and conditions apply to another company’s terms and conditions is a novel legal approach. When one company targets and wins another company’s customers that means all pricing and related terms and conditions will be those of the new supplier, not of the old supplier. Unfortunately, Barry Man’s simplistic overview does not make sense against this. That is the reason for competing arguments over what actually took place. Unfortunately, the Mr D decision was set in stone as evidence submitted by Sakagawea was not even considered (see another’s earlier Post).

Dismissing comments from many other Posters because they have not also submitted supporting documentation is not what this Forum is about. Similarly Barry Man submits no documentation to support his views. Readers make their own judgements based upon sense, logic and their own documentation - however, no relevant documentation seems to be possessed by Barry Man. Clearly, complaints have been evidenced when submitted to FOS and the FCA – apparently Barry Man did not read about the Sakagawea 70+ pages and 70+ attachments of supporting evidence.

It is naive to think it makes sense to publish one’s case so the other side can be armed to respond. Aviva has not done so and FOS has not made Aviva’s case available to policyholders – only Mr D partially managed that through a Freedom of Information Act request AFTER he lost his case. Barry Man failed to even read davidstone’s comment that the Sakagawea case was submitted to the ombudsman on Tuesday, 27 March and responded to on Monday, 31 March – FOS dismissed it out of hand because it was stuck with the Mr D decision and the OHRA Article 8 authority.

Evidence submitted by Sakagawea drove FOS into a corner. Charging for Age-Related claims was no longer rejected but accepted as long as everyone was charged equally – premium pricing was pushed to the FCA. That was also the case for New Entrants. Whilst the former was not worth a mention by Barry Man, the latter was an aggravation for him! Maybe after a few rereads of the ombudsman’s decision on Mr G, Barry Man will work up an equal aggravation for the former and the lost GLB. Ignorance is bliss as they say.

Barry Man’s comments concerning medical inflation and New Entrants’ rates seem to be Executive and Optional Scheme matters and I will not add to any confusion he has on this point. His comments on Aviva’s right to cease the policy missed the change in the ombudsman’s view caused by the Sakagawea evidence that attempts had been made to withdraw the policy. Also Barry Man missed Aviva’s threats revealed by davidstone’s post (although Barry Man probably dismissed them as davidstone had probably not sent him the actual letter!).

Thank you for making me laugh though.

Noakes

Please everyone do not get caught with the ramblings of someone who does not have the correct documentation and is not a Healthcare policyholder subsidising others. The particular poster has not even worked out the reason Aviva never gave him the terms of its 2001 offer.

I say this as I am enormously grateful for the information and analysis provided by the Sakagawea team. I understand it and have confirmed it for myself with my own documentation as everyone else needs to do. Also comments have helped me pick out key issues so I can appreciate the ombudsman decisions.

Policy and guarantee availability are obviously under threat. However the guarantee is meaningless according to FOS as premium increases can be made for absolutely anything as long as they are shared equally. Consequently, FOS has no problem with the 2012 increase being maintained even though it admits the increase was to charge more for the guarantee and must therefore be Age-Related. Pushing premium pricing and new entrants to the FCA to take decisions on was the only way the Mr D decision could remain. However, keeping it means we were all mis-sold a guarantee that guarantees absolutely nothing.

Kennet

I am a retiring business manager but it does not take a genius to work out that when the reported 24% lapse rate, from 2012’s premium increase, is applied to marginal profitability of some £300,000 then financial melt-down must result. Maybe, resulting losses will have been lessened through premium increases in subsequent years. However, this recent lapse rate makes the Medios operation financially unsustainable – due solely to Aviva’s deliberate killing of its own scheme.

Armed with latest information from this Forum I got a quote late yesterday afternoon for a substitute policy. It does not have any guarantee but Aviva’s guarantee provides nothing as charges are still made for Age-Related claims under FOS’s Mr G ruling despite its guarantee representing otherwise. It does mean I have to take a moratorium for existing illness claims for the next 2 years. However, annually it is £1,000 cheaper if I make no claim and £3,000 cheaper each year if my wife and I both claim. That is based on both of us being in our mid 60s and accessing some of the hospitals in the top band – the ones we want. As a Healthcare policyholder it is a no brainer.

What started out for Aviva as a good idea, to make more money by pushing everyone into its main No Claim Discount product, has ended up as complete financial mayhem. Top stream income provided by Healthcare policyholders will dry up and disappear as we all run fast to competing companies, now we know our guarantee is worthless and we are being overcharged to create excess income for Aviva and to supplement privileged groups of Medios policyholders. The clamour about mis-selling will also not go away as it is so obvious – that should cost Aviva a packet and its immediate cash flow will be more than just dented.

Aviva will have no financial choice but to stop Medios policies and to close down its Eastleigh administration. Healthcare policyholders have no choice but to exit and shout and scream increasingly about mis-selling. It will be the turn of Optional and Executive policyholders to fall foul of Aviva and to cry about consequences!

By coincidence I note this Forum has now heard from 2 policyholders that have Optional or Executive policies both claiming blindness to Aviva’s 2001 Offer and the resultant OHRA Article 8 authority that has blighted this case from FOS’s start to finish. Good luck to their continued love-in with a proven untrustworthy Aviva, which is even labelled misleading by its closest supporter, FOS.