Aviva Medios Healthcare - are we being treated fairly?

BakerA

I share below my reasons for not accepting Aviva's offer in the hope it helps others.

The primary purpose of the Mr G ombudsman was clearly to support the Mr D decision. However he could only do that by limiting his decision to whether the premium increase was applied equally and by pushing any other matter to the FCA. Equally he could only do that by not investigating the New Entrants' position so he also pushed that to the FCA. Aviva's attempts to withdraw the policy were dealt with by him ignoring them and stating the policy had not been withdrawn. OHRA's dreaded Article 8 authority was only possible to be dealt with by his mistake in not realising it had been restricted by the Aviva authority in 2001 and focussing only on its further change and unauthorised broadening in 2003.

Against all that how can I in good conscience accept compensation based upon such nonsense. I feel strong and resolute in joining the increasing chorus on mis-selling. That way I will sleep at night. I will also follow the direction indicated by Kennet - his analysis is excellent.

heathcote_2

I have decided to accept the FOS offer of £550 compensation for the mishandling of the 2012 increase.

Premiums will increase in time as medical inflation increases and the book loses the benefit of new entrants and as policy holders die and leave. There is nothing that can be done to stop this. I am way past my one age increase.

I have paid over the odds for the guarantee of no further age related increases but it looks like I will have to cut my loses and find a new policy. Luckily for me health is not an issue and I feel sorry for those left behind who are not so fortunate.

I will continue to feel aggrieved but I suspect both Aviva and me have both lost money over this and actually maybe OHRA would have made even more of a mess of it.

I do agree with some of the comments of late that there seems to some posters who have got together and are unwilling to share information for some reason. If we want to be successful in any court action then a more open approach is needed involving all claimants. Individual claims have shown to be been unsuccesful with the FOS and probably FCA.

how_2

Apologies for late responses to direct emails as have been working away. Will deal with them all this afternoon.

On points fairly raised by heathcote I can assure policyholders that Aviva has not suffered financially. In the period 2005 to 2011 it made £3.124 million of underwriting profit. Profits tailed off towards the latter part of that period to around £300,000 due to the impact of increasing Age-Related claims not provided for when the related premiums were taken to profit.

That meant huge profits were made by Aviva in the 2001 to 2004 period. That enabled Aviva's underwriting profits from policyholders to exceed well beyond £10 million.

Just to give policyholders some idea of the massive profits Aviva earned ibetween 2001 and 2004

For the year 2000 (just prior to the 2001 offering of our policy) Aviva Health's turnover was £55 million and its profits were less than £300,000. The following year (2001 - when results from our policy offering were first included) it's turnover rose to over £73 million and its profits to over £4 million!!

So nothing to feel sorry about for Aviva but not necessarily for policyholders.

On the dissemination of information, we are acting exactly as Aviva is and policyholders will thank us for that if the FCA acts. A lot of the issues have not been mentioned in this Forum but that is because Aviva keeps moving the goal posts - just as it did when it changed its story for the premium increase 2 years after learning that its first story had failed. Any information we release causes Aviva to move the goal posts yet again. Truth and Aviva do not always seem to go together.

Barry_Man

I know I may be tempting fate by asking this (given the response to my earlier post), but here goes.

One key piece of information that I still have not seen is a copy of Aviva's 2001 policy wording / terms (for any of the Medios policies). One correspondent did send me what they seemed to think was such, (but it turned out to be an outline of key features).

If anyone has such documents, I'd very much appreciate a copy, even at this late stage.

Jean819

I hope I can help Barry Man’s understanding just a little bit even though it's all now too late as the matter has been left to the FCA, to do with what it wishes. Also he’s wasting effort and other people's time in making comments without documentation.

First, Barry Man needs to understand that most comments in this Forum are devoted to the Healthcare product. They are not necessarily appropriate to the Executive or Optional Schemes and members of those Schemes need to refer to their own documentation.

At the same time I am aware Mr D is an Optional policyholder and that FOS applied his OHRA Optional terms and conditions to our Aviva Healthcare policies. However, Aviva Healthcare policyholders previously had no interest in claiming about any lapsed OHRA policy of any sort and certainly knew little or nothing about OHRA Executive or Optional Schemes. Consequently, Aviva Healthcare policyholders cannot provide comment upon the rights and wrongs of FOS’s methodology, especially as FOS has refused all information to enable us to do that anyway.

I don’t know which Key Feature documents were sent to Barry Man but it’s the Key Features he needs. They detail the product’s aims, how it works, and the risks of buying for making informed judgements. Questions and answers are provided to detail the principle terms of the product and what it will do so informed judgements can be made. This all comes from the Regulator’s Prudential Regulations. Consequently, dismissing those Key Features as Barry Man does is ......!

Aviva’s formal 2001 offer was set out on one page, which stated the contract of insurance comprised “these Offer Terms, the Policy Wording, the Policy Schedule and the Hospital List” – that one pager has been openly offered by a member of the Sakagawea team to assist policyholders. A brochure headed Policy Wording was provided as a single document comprising 24 pages. Preface and Brochure was from page 2, Key Features from page 6, Key Benefits from page 9, Policy Wording from page 10, and Hospital List from page 22. It is the information from pages 1 to 6 that the first ombudsman (for the Mr D decision) referred to as overarching promises.

On page 8 of that single 2001 document, the questions and answers detailed the principle terms of the product (as usual for Key Features – see above Prudential Regulation explanation), and stipulated that “premiums are increased to correspond with the cost of claims and other inflationary factors”. I appreciate this could be different for Executive and Optional policyholders whose premiums might be based upon New Entrants’ premiums if I have that right – but Barry Man will or should know.

Also on page 13 of this same document, Article 7 of the General Conditions stipulates that “We may alter the standard terms of the policy” which contrasts sharply with the OHRA Article 8 that “OHRA is authorised to apply to current insurances any changes in conditions or premiums”.

These are and have always been the main issues for Healthcare policyholders. Obviously, two others have since arisen. First, they now realise they have been the main contributors to Aviva’s excess income and have been subsidising Executive and Optional policyholders. Secondly, and most importantly, the ombudsman decisions have made them realise they were mis-sold their 2001 policies and every annual continuation thereafter as the Guarantee of Age-Related protection did not do as it represented as Age- Related claims are chargeable according to the Mr G ombudsman decision.

Let me thank the Sakagawea team for providing the full Mr G decision to many of us as we await its publication on FOS’s website.

As for Executive and Optional policyholders, their analysis of their own situations could well be different and I do suggest to Barry Man that he focuses on his own Executive policy which very few of us can help him with. However, I do sympathise with him that those groups of policyholders do not have the equivalent of the Sakagawea team looking after their interests.

Napier

There seems a reluctance to shout out the obvious.

Aviva's Healthcare product is totally different from its Optional and Executive products.

It is a lot more expensive because of the massive excesses – some £3,000 for most married couples.

Its premium increases are limited to inflation – Jean819 correctly identifies that Prudential Regulations require that Key Features must set out principle terms in a Question and Answer format and that the inflation limitation is there for all to see on page 8 of Aviva’s 2001 Offer.

Yet Optional and Executive premium increases are fixed by the premiums charged New Entrants in their entry Age Band. That provision is clearly set out in the GLB provision of the Optional and Executive Policy Wording. However, that same wording does not exist within Healthcare policy wording - the corresponding Healthcare provision is solely focussed on the one allowed Age-Related increase applicable to them but not to Optional and Executive policyholders.

Clearly Healthcare policyholders have been mis-sold a Guarantee that cannot perform as it represents. That’s because no Age-Related increases are allowed at all. Yet FOS has determined they should be allowed as long as they are shared equally across the DIFFERENT types of policy!!!!

I will not get into what Optional and Executive policyholders can or might claim as that is for them. However, they have had their own advocate in Mr D, PMW2012. Unfortunately, Mr D made their case an OHRA matter, dependent upon the OHRA Article 8 unlimited authority to change conditions and premiums.


It was incredible for anyone to suggest an Offeror’s terms should be set aside to be replaced by those of a different earlier provider. Our lives would descend into fantasy if that happened in other areas. Maybe Mr D did not realise the Aviva offer was what it said even though all company names had changed to make that obvious. However, for whatever the reason, an enormously expensive injustice resulted. Optional and Executive policyholders will just have to hope Mr D does not similarly interfere with any FCA investigation.

davidstone

Lots of requests have been received for more explanation on the Mr G ombudsman’s ducking and diving to support Aviva.

Ombudsman’s claim that Aviva’s 2001 policy was annually renewable
No reasoning was given by the ombudsman for this view even though the ombudsman acknowledged the policy was marketed as a long term policy. Equally importantly, the ombudsman made no comment at all on the substantial evidence that showed it to be a long term policy. This diving would have been red carded in a game of football.

Authority to change policy
The authority that Aviva represented as applying to its 2001 Offered policy was ducked completely by the ombudsman. Instead he pretended the 2001 authority never existed. He did that by starting with the OHRA Article 8 authority and pretending nothing happened until Aviva introduced an unauthorised equivalent in 2003. As the 2003 change was no worse than the OHRA’s Article 8 authority, the ombudsman saw no problem with it.

Well no prizes can be given to the ombudsman for not being able to read 2001’s Offer document!
It was like Nelson putting the telescope to his blind eye and carrying on regardless!!
Blind justice!!!

Closing the scheme to New Entrants
The ombudsman admitted that reason existed to draw the conclusion that the closure of the scheme to New Entrants unfairly prejudiced existing, older policyholders. He thought that might be alleviated through provisioning in early years but didn’t know the answer. That afforded him the opportunity to ignore presented evidence that proved policyholders had been prejudiced from every perspective. Instead the ombudsman professed ignorance to be bliss so he could disqualify himself from any conclusion other than that Aviva had not necessarily, therefore, done any wrong. As for the absence of Market forces, the ombudsman admitted that to be a recognisable concern but one that could be disregarded as another aspect of the decision-making process was outside FOS’s scope!

So first we got a duck and then a dive. It begged the question whether FOS had a private arrangement for Aviva to be given carte blanche to do anything and everything.

Imposition of the 20% increase
The Guarantee was viewed just as a “complicating factor”, something that didn’t survive the ombudsman’s initial considerations.

Medical inflation was an ideal expectation and, according to the ombudsman, anything otherwise “raises questions about Aviva’s management of the scheme” – however an issue “better addressed to the FCA”. Then the ombudsman said the opposite applied when he stated Aviva was able to take into account other factors, including the cost of claims, when setting premiums. He provided no explanation for that complete turn-around. Worst, he did not explain how that was reconcilable with the principle term of Aviva’s 2001 Healthcare offer which stipulated inflation only increases.

As if all that was not sufficient ducking and diving, the ombudsman went back to supporting the historical under-pricing rejected by FOS for the Mr D decision, which had, in turn, caused Aviva to change its story to Claims Experience. That historical under-pricing, which had so vexed FOS for the Mr D decision, was then represented by the Mr G ombudsman as a matter for the insurer’s commercial judgement! Had this man been drinking!!

If a Guarantee that protected against Age-Related Premium was ever a reality, this ombudsman’s explanations showed that it did not survive birth.

Extraction of premiums under false pretences
This complaint was based upon misrepresented Terms for 2010 -2012. However, the ombudsman ignored that totally. Instead he diverted attention to his views about the actual New Entrants’ closure, an event he effectively bypassed on the basis of ignorance being bliss. Yet more ducking.

Incorrect respondent
FOS’s willingness to allow Aviva carte blanche on anything was vividly demonstrated by its promotion of a private agreement between Aviva Insurance and Aviva Health where the latter is permitted to act for the former. FOS allows and insists that such agreement be extended so claims against Aviva Insurance become reinvented as claims against Aviva Health. An analogy is to sue a restaurant for food poisoning and then discover you are instead suing one of the waiters (instead of the restaurateur) when you arrive at Court. Even worse as FOS’s present powers come from the Financial Services and Markets Act 2000 and it is that Act which FOS insists upon openly defying and breaching. The ombudsman’s excuse was that Mr G “is not adversely affected” without adding in ‘by FOS’s breach of the Act’ – even more ducking.

Barry_Man

I don't intend to get bogged down in details or further discussions. But I would like to correct some fundamental errors and misunderstanding (hopefully for your collective benefit so that you can go forward [in whatever manner you choose] on a better informed basis).

Before doing so, I would particularly like to thank Jean819 for a highly constructive approach, an aspect so lacking in some of the other recent posts. One comment on what I described as outline of key features – this was a bit of a misnomer as it was seemingly headed Policy Wording, but clearly was nothing of the sort and contained little of substance. But that is by the by.

One company targeting and winning another company’s customers!
From Adamson's post #259 “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”

I cannot disagree more. No such thing happened. The OHRA business became part of CGU and subsequently NU (which renamed as Aviva) by a series of mergers and acquisitions. Delta Lloyd (100% owned by CGU) merged with NUTS OHRA late in 1999. Following the merger of CGU and NU (to create CGNU) the OHRA business was transferred to NU Healthcare in 2001. The transferee entity assumed all assets and liabilities (e.g. contractual benefits and obligations) from the transferor. And the business is still conducted from the same premises as OHRA had back before the changes, seemingly using the same computer systems until not too long ago. The one thing that did not happen is one company targeting and winning another company’s customers. If you want to find out more, just google for the relevant parties.

2001 Ts & Cs
I must say that I have no recollection of any such 2001 “offer”. I do wonder if this was somehow specific to Healthcare. This might explain why (based upon Mr D's submission), the FOS response makes no reference to 2001 Ts & Cs. Mr D (or any other Optional / Executive policyholders) might be able to shed some further light. As an aside, I have to say that I find it somewhat ironic, given the assertions about this forum thread being about Healthcare, that the one policy presented to FOS was Optional.

On the matter of commonality or not of the Healthcare / Executive / Optional policies, my view is that they were all in the same family, but with different options. Others may choose to differ.

Aviva Health UK vs Aviva Insurance Ltd.
This set-up is not unique to Aviva. OHRA had a not dissimilar set-up (at least on a prima facie basis). The insurance was arranged with OHRA UK Ltd, but the underwriter was OHRA Ziektekostenverzekeringen NV in the Netherlands. I have certainly had other insurances where the arrangement was with one party but underwritten by another. Even to the extent that, in at least one case, the underwriter was changed part way through a policy year. I cannot comment on all the ins and outs, but I fear that some maybe trying to read too much into this set-up.

Inflation
There still seems to be some confusion over this. Napier seems adamant that premium increases are limited to inflation. And yet Jean819's quote of the policy wording explicitly states that this is not the case “premiums are increased to correspond with the cost of claims and other inflationary factors”.


Lastly another differences between Executive, Optional and Healthcare.
Executive age bands were at 5 year intervals. Healthcare were at 10 year intervals. I can see that some Healthcare policyholders will have suffered potentially swingeing premium increases (by the time of their one and only age related increase) as a consequence (particularly if they got caught by such increase only kicking in after the 20% premium hike). I can see that the insurer would have wanted the age bands on Healthcare to be extended for exactly that purpose. I have no information on Optional with regard to this particular aspect.


That's it – I'm out, other than to wish all the best of luck in whichever path they choose to follow.

fsLegal

Whatever the rights and wrongs of the ombudsman decisions, their existence, Aviva's part in them, and Aviva's associated actions mean the FCA has been presented with a massive mis-selling situation.

However, my main interest is to correct the confusion Barry Man creates through dislike of detail or discussion, and his confessed absence of paperwork.

Corporate history
He misses entirely all reference to OHRA Ziektekostenverzekeringen NV which issued him his policy in the 1990s. That Dutch insurance company continues unchanged as a subsidiary of a company whose shares are traded on the Amsterdam and Brussels Stock Exchanges.

Instead Barry Man focuses on a minor marketing OHRA subsidiary that marketed OHRA Ziektekostenverzekeringen NV’s private medical policies within the UK. What actually happened is that Aviva Health purchased the OHRA subsidiary’s Customer List. Aviva Health’s purpose was to target the OHRA subsidiary’s customers with a look-a-like policy then being launched by Aviva Insurance. The launch date was 1 January 2001, the day after all OHRA Ziektekostenverzekeringen NV policies lapsed.

To achieve its purpose, Aviva Health followed a process used when targeted activities of insolvent or bust companies are purchased. That enabled Aviva Health to avoid all the seller’s past arrangements and responsibilities. Besides avoiding outstanding problems from those past transactions, Aviva Health also avoided resulting accumulated losses which would have otherwise wiped out its capital. An inconsequential part of that process was the purchase of certain office assets and the employment of an office team to facilitate customer service.

Barry Man could have found all that out and got his facts right had he paid £1 and conducted an appropriate search. He would then have learnt that his 2000 OHRA Ziektekostenverzekeringen NV policy had lapsed before Aviva Health’s involvement and that Aviva had worked hard to ensure it avoided all and any past arrangements entered into by OHRA.

Terms & conditions
Aviva Insurance’s 2001’s Terms & Conditions were just that. Aviva freely chose and stipulated those terms when making a legally binding offer to targeted sales prospects. In doing that, Aviva Insurance actually took on the market as its actions caused a lot of criticism because its chosen terms and conditions differed so much from the OHRA policy it was supposedly mimicking. PMW2012 has previously let it be known that Aviva informed FOS it had not even been interested in OHRA’s pricing model as it had only been interested in promoting its own product. Statutory filings evidence that Aviva Insurance made an offer of its own policy. Again Barry Man could have found that out for a £1 with an appropriate search. Equally that fact was evidenced by policyholders’ retained documentation.

I appreciate Barry Man did not retain key documentation, which causes him not to be able to remember what happened some 14 years ago. However, the fact is that it did happen as otherwise he would not presently have his policy. Irrespective of his memory loss, that meant he confirmed medical information as true and complete so Aviva could rely upon it, consented to the processing and use of personal information, and forwarded a direct debit or cheque to Aviva.

Aviva Health v Aviva Insurance
Barry Man fears that too much might be read into whether it is one company or the other. However, his prior post stated he was vexed about changed wording with respect to the policy being continued for life. He described the ombudsman’s decision as “perverse and extreme”. Equally he was vexed about the ruling on New Entrants, which he said was “at least incompetence and possibly malfeasance”.

Just suppose the ombudsman would have ruled in his favour on one or both points. If that had occurred then the decisions could not have been imposed on Aviva Insurance as the judgement was against Aviva Health. The Financial Services and Markets Act 2000 is very clear on this point, as are FOS’s web site and FOS’s publications. Once more Barry Man comes up short because of a lack of understanding, even though all that information is freely available to anyone that bothers to search for it.

Inflation
Barry Man does not seem to understand Jean819's quote of the policy wording that “premiums are increased to correspond with the cost of claims and other inflationary factors”. The words ‘other inflationary factors’ mean that the words preceding the underlined ‘and’ have also to be inflation. Whilst I appreciate Barry Man’s quick read and excitement caused him to think otherwise, he needs to read wording more slowly and absorb what it says. Perhaps if Barry Man had seen the wording after Aviva manipulated it in its evidence to FOS, he would not have even needed to slow down his reading and absorption of information.

Differences between policies
Unfortunately the litany of errors Barry Man commits and his confession of an absence of documentation cause an inability to rely on any information he provides.

I note the Sakagawea submission and related Forum comments do not seek to differentiate between policy types. Similarly that is the case for claims made by the Sakagawea team to the FCA, as readily apparent from the letter made available to policyholders.

However, I do understand that certain groups of policyholders will be more inclined to settle with Aviva if they believe their present policy is competitively priced. Policyholders that think otherwise are more likely to consider their documentation against Forum issues when making decisions.

claremont

More and more of the knowledge about Aviva's wrongdoings keeps seeping to the surface. That makes me realise just how much rough justice has been meted out to policyholders. Mr D has a lot to answer. Without his wrong direction, Aviva would have never been given the opportunity to mislead to the extent it has. As for the ombudsman, I have never witnessed so much ducking and diving and lack of reason for the nonsense FOS has come out with. Together all those parties have combined to create one massive mis-selling mess.