Aviva Medios Healthcare - are we being treated fairly?

burtwood

All Aviva Medios policyholders welcomed the Governor of the Bank of England’s reminder that integrity, honesty and skills are not optional matters for Insurers and their Senior Managers.
This is highly relevant for policyholders as all of them have been hoodwinked into paying dearly for future protection from Age-Related premium increases.
Yet their premiums have been increased hugely for the Age-Related costs they were promised protection from.
They are now all victims of what seems to be an insurance scam that matches any other and that, rightfully, causes them to complain about mass mis-selling and misrepresentation from 2001 to date – believed to involve some 25,000 policyholders and some hundreds of millions of pounds of ‘stolen’ premiums.

The focus on FOS decisions on individual claims has understandably taken the spotlight away from Aviva, the culprit in all of this.

True, FOS’s first ombudsman went partially down the right path by seeking to exclude Age-Related costs from premium increases. However, she was misled by Aviva’s representations that its specified Claims Experience formed no part of those costs. Worse, she didn’t focus at all on Aviva’s 2001 Terms & Conditions. The latter was because that didn’t suit Aviva despite Aviva having taken great care to protect itself from OHRA’s pre-2001 obligations, responsibilities and rights. Mr D, on the other hand, had forgotten or had not appreciated that he had confirmed his medical history to Aviva as true and complete, consented to Aviva’s processing and use of personal information, and forwarded a direct debit or cheque in order to accept Aviva’s 2001 new policy Offer. We know that as otherwise he could not now possess an Aviva Medios policy.
The sad outcome was a combination of

• Age-Related costs being charged, despite a Guarantee that promised otherwise, with
• an imposed Authority that allowed Aviva to do anything, despite its 2001 offer terms specifying otherwise.

No wonder, Aviva Medios policyholders continue to shout foul and to claim mis-selling and misrepresentation.

True, FOS’s second ombudsman sought to dive more often than an Olympic diving gold medallist.
Even Aviva’s first story of an extra Guarantee charge was given the green light despite the first ombudsman’s efforts, albeit failed ones, to do otherwise.
Aviva’s 2001 policy Terms & Conditions became invisible non-mentionable matters.
Other unexplainable embarrassments became matters ignored or better addressed by the FCA, even if previously addressed by the first ombudsman.
Whilst clearly acknowledging the ideal way the scheme should operate in practice (as claimed by policyholders), the second ombudsman’s get-out reasoning was simple and straightforward, in that FOS does not “normally interfere” with the setting of premiums.
He was totally unconcerned with Government’s and the Regulator’s efforts to ensure clarity for all charges. In effect, anything went and anything could be charged, even if contrary to agreement, as long as it was wrapped up in a premium.
Not unexpectedly, that decision re-energised policyholders’ shouts of foul as well as their mis-selling and misrepresentation claims. It also laid waste to Government and Regulator efforts to bring clarity to charges, an essential cornerstone of the desire to move from State reliance towards savings and self-responsibility.

That brings the focus back onto Aviva and its part in all this.
It disavowed the Authority contained in its 2001 Terms & Conditions in favour of one it had contractually excluded, if one accepts the truth of Statutory filings.
It disavowed the explanation given in its 2001 Terms & Conditions for premium increases and, instead, presently claims that premium increases have always included Claims Experience.
It disavowed representations made each year, from 2002 to 2011 inclusive, that premium increases were solely for medical inflation with its present claim that those increases have always included Claims Experience.
It waited until 2014 to point out that New Entrants no longer existed despite having represented their continued existence in its Terms & Conditions from 2010 onwards.
It misled the first ombudsman into believing its present specified Claims Experience was not Age-Related. The second ombudsman’s realisation of this misdirection forced him into accepting Aviva’s previously withdrawn story of extra Guarantee cost, even though that had been previously rejected by the first ombudsman. To do otherwise would have necessitated changing the award to policyholders.
Aviva even sought to kill its own policy to avoid its obligations to policyholders. That wrongful action caused policy lapses that averaged 9% for each of the 5 years preceding 2012 and then rose to 20% for 2012.
A long list of other related alleged wrongdoings is, hopefully, also being presently considered by the FCA. Some 10 ‘smoking gun’ issues have been identified and evidenced. They all centre on the issues of integrity and honesty recently voiced by the Governor of the Bank of England.
No wonder the second ombudsman dived on premium increases and New Entrants when claiming the FCA to be better placed to address such matters; that being the only way he could maintain his self-confessed ignorance on both subjects.

Aviva is the culprit and cause of all the mayhem inflicted upon policyholders.
Understandably, policyholders seek action from the FCA as there is no place for this sort of behaviour in any regulated marketplace.
Also a predictable, consistent and measured Regulator must be an essential part of any viable marketplace, as recently acknowledged by the FCA’s Head of Supervision.
Even the second FOS ombudsman raised questions about “the scheme” he said the FCA needed to address.
Consequently, regulatory silence can only cause consumers to view the UK’s marketplace as uncertain, unreliable, and one best to be avoided.

As apparent from other postings to date, policyholders are going to continue to shout out as loudly as possible about their complaints at every opportunity. That persistence reflects the importance they attach to their families’ health insurance. Equally the consequences of existing illnesses will stay with them for some time to come, if not for the remainder of their lives. Those factors mean there will be no let-up in their efforts. If left unresolved, their claims will become running sores that constantly eat away at market confidence and ultimately become an even greater embarrassment for all market participants.

FinanceExpert

Aviva’s offer to protect against Age-Related premium increases was mis-selling from the very start. Aviva misleadingly offered a policy Guarantee that protected buyers against Age-Related increases. Worse, it promised that protection was available for life. If that was not enough, Aviva used those Guarantee promises as unique selling features to ‘steal’ hundreds of millions of premium income.

The evidence for this is damming. Having misleadingly misapplied ‘stolen’ premiums for its own benefit, Aviva refused to set aside necessary monies to cover future claims from already paid premiums. We know Aviva must have refused as it is mandatory to provide for all future claims that relate to existing premium income. That obligation reflects an accounting convention that is incorporated into Statute. Also it is a Regulatory requirement demanded by both past and present Regulators. In the event those mandatory directions are not followed, then all creditors are misled and put in jeopardy, and that includes policy buyers. The only realistic defence for non-provisioning would be for an insurer to show it is has always been its intent to charge policyholders for Guarantee costs upfront and then yet again when Guarantee costs actually arise. Each year, for every Statutory Financial Statement and Regulatory Return, Aviva needed to demonstrate intent to charge policyholders twice in order to avoid making provisions for future claims relating to paid premiums. Obviously that meant Aviva knew in advance that it was going to renege on its Guarantee.

Separately but equally damming, Aviva informed FOS that Claims Experience had ALWAYS been charged to policyholders when it calculated premium increases. Therefore there is no doubt that had been the case from the first moment Aviva marketed its own Medios policies. There cannot be a clearer or more unambiguous confession by Aviva, as often occurs when excuses run out - after all its initial story had been promulgated for some 2 years before being rejected by FOS, so Aviva was in the last chance saloon when forced to come-up with its belated substitute story. That confession could not have been more massive as for EACH year, from 2002 to 2011inclusive, Aviva had written to policyholders and told them that premium increases were for medical inflation!!!

From whichever way one approaches this, it is clear and inarguable that Aviva Medios policies were mis-sold from the very first moment they were marketed. The promised protection has never ever existed - from a misrepresented start, to year after year of lies, followed by this lurid story’s full unravelling as the product’s ignominious end inevitably approaches.

Some might allege that various laws have been broken and many parts of Regulators’ Rulebooks have been breached. Whether that is right or wrong, it would be extraordinary for the present Regulator not to put this right. If Aviva can get away with such extreme, outlandish and deliberate mis-selling, what hope remains for buyers of any other protection products!!!

mwng

Wow. No posts for over a month. Aviva must be delighted.

delta99

Perhaps the logic has been to spread a single strong message to a fast growing audience, rather than to provide multiple messages to the same people. Getting justice is sometimes an enormous challenge, as many have discovered before.

Whilst the Financial Conduct Authority’s tone is high on consumer interest one must accept that is more show than reality. Also, the extent Aviva is favoured and protected by the Financial Conduct Authority must surely be a worrying issue for victims. Aviva inhabits rarefied air shared by few and is the one insurer that might be untouchable whatever its crime.

Certainly, the rest of us in the Financial Services industry would never escape the complained about mis-selling. We have to accept that a level playing field does not exist. Whether it is misplaced trust or naivety, the Financial Conduct Authority finds it difficult to accept that best friends can do wrong.

PS
I note mwng's subsequent comment. He does not realise that the Financial Ombudsman Service determined the policy was annually renewable, whether that be right or wrong. That means that each year the policy is a new sale. He would do well to listen to the various experts that give their time to this cause. The point made by ethicsman is massive. The Financial Conduct Authority has a mega issue to respond to.

ethicsman

Aviva’s past mis-selling of its Medios PMI policy must be of major concern to the Financial Conduct Authority assuming proper and full examination of complaint issues. Hopefully, gone are the days when it was necessary for pressure to come from overseas and other Agencies to unearth long running scandals, involving key industry players. The Financial Conduct Authority even wants us to believe that it is now being proactive in ensuring consumers’ needs and expectations are met, through gauging consumer comment. Whether this improvement is true is something we will all be well positioned to judge and to voice opinions on.

However, there is a connected but EQUALLY IMPORTANT further issue that concerns the undisputable fact that Aviva’s Medios PMI policy offers and guarantees protection against Age-Related premium increases but actually does not provide that protection at all. As readers of this Forum know, the policy specifically charges for Age-Related costs as opposed to providing the promised protection from those charges. Forum readers know this from reports of Aviva telling the Financial Ombudsman Service it always increases, and has always increased, premiums for Age-Related Claims. Unforgivably, Aviva has kept that secret from policy buyers, thereby enabling it to continue to ‘steal’ their premiums.

And it is the question of ‘CONTINUED STEALING’ that equals the complained about Aviva mis-selling. That is because each year Aviva continues to sell its Medios policy to thousands of unsuspecting customers, who have no idea the policy does not provide its guaranteed protection against Age-Related premium increases. Those thousands of people have no idea because they have not been privy to the complaints, made by the few, to the Financial Ombudsman Service. Nor have they visited this Forum. It is an Aviva secret that enables Aviva to mislead policy buyers and therefore, apparently, to continue to ‘steal’ their money.

EVEN MORE WORRYING is the issue that Aviva deliberately continues to mislead consumers to buy this toxic product WITH THE FULL KNOWLEDGE AND THEREFORE CONSENT OF THE FINANCIAL CONDUCT AUTHORITY. In effect the Financial Conduct Authority is approving this ongoing mis- selling and misleading of product buyers.

The significance of this is humungous when considered against the resources the Financial Conduct Authority applies to identifying and publicising the names of unauthorised organisations that sell unauthorised toxic products, as opposed to authorised toxic products. So far in July, the Financial Conduct Authority has published an average of 1 warning every day about the investigated activities of unauthorised organisations. For one of those, it even commenced a criminal prosecution for 13 alleged offences.

Yet Aviva seems to be ‘stealing’ some £6 million in premiums from thousands of policy buyers ANNUALLY for a toxic product the Financial Conduct Authority actually approves. Surely any such ‘crime’ cannot be left ongoing and unpunished. Aviva’s ‘offence’ is even greater than that of unauthorised organisations as it concerns actual ‘stolen’ monies rather than just unauthorised cold calls. If a cold call hit rate of between 0.5% to 8% is applied to the premiums Aviva is apparently ‘stealing’ annually, that equates to a targeted sales value of between£75 million to £1.2 billion – probably more than all the business targeted by unauthorised organisations (beaten-up by the Financial Conduct Authority) over the course of a year. Even worse, Aviva has collected around £100 million of Aviva Medios premiums over all the years it has misled customers – that is equivalent to unauthorised organisations targeting toxic sales of between £1.25 billion and £20 billion!!!

This ongoing toxic mis-selling has huge, humongous implications for the Financial Conduct Authority. The only difference, between the unauthorised organisations selling toxic products and the Aviva Medios PMI product, is that the Aviva Medios toxic product is AUTHORISED and therefore APPROVED by the Financial Conduct Authority.

Unless the Financial Conduct Authority takes corrective action, it must become an active and knowing participant in what is going on, as complainants say they have fully briefed the Authority on what is going on.

mwng

I am unsure about the above comment.

Aviva are not still selling this product with a Guaranteed Loyalty Bonus (no age related increases). If they were still doing so and hiking premiums willy-nilly I am sure that the FCA would be down on them like a ton of bricks.

What they ARE doing is breaching the existing guaranteed loyalty bonus held by a large number of existing Medios policyholders in a most shameful fashion, and they have shut down the FOS by convincing the FOS lawyers that this particular activity, whist reprehensible, is outside the FOSs terms of reference.

Regardless, what we have here is either (1) a clear case of breach of contract, or (2) a clear case of mass mis-selling.

It therefore must be for the FCA to react.

TroubledAdviser

Every day the Financial Conduct Authority delays a response to Aviva’s mis-selling scam is another day closer to when Financial Advisers will get hit with the problem. It’s like the Financial Conduct Authority is throwing off its regulatory responsibility and passing it to the marketplace. Unfortunately, that can only bode disaster and market mayhem.

ethicsman is spot on when expressing concern about Aviva’s ‘continued stealing’. Not only does Aviva’s Medios product promise and CHARGE EXTRA for protection against Age-Related premium increases but its premiums are increased YET AGAIN for those same costs. It’s like paying premiums for two policies as opposed to the single policy issued.

delta 99 correctly identifies that the Financial Ombudsman Service has determined the policy to be annually renewable and, whether that’s right or wrong, that does mean that each year the policy is a new sale – the only benefit is that account can be taken of past documentation, albeit that’s more likely to be a negative in this case . Accordingly, when 2015’s premium notices are sent out in some 3 months’ time, all Financial Advisers are responsible for ensuring the product is suitable for meeting customers’ individual demands and needs.

For Financial Advisers, like myself, that presently seems an impossible challenge. For Aviva’s direct sales it could be a challenge too far because of its need to disclose pertinent information that everybody now knows it possesses.

The first ombudsman informed the market that Aviva had increased premiums for Claims Experience but that Aviva had assured FOS that ”no part of the premium was allocated to cover the cost of the Guarantee”. However, the second ombudsman said the premium could be increased to cover the cost of the Guarantee “provided any charge was applied equally across all age bands”. He even sought to substantiate that opposite position by accepting Aviva’s previous explanation that “the sharp increase in 2012 was because of historical under-pricing of premiums”, thus “causing the scheme to operate at a loss”. An incredible turn-around that must have even shocked Aviva; after all, Aviva had dropped that explanation and replaced it belatedly with one of “Claims Experience” after it learnt FOS had rejected it in March 2013. The only reasonable explanation for the second ombudsman’s action was his further comment that “the setting of premiums is a matter for the insurer’s commercial judgement with which we (FOS) would not commercially interfere”. That not wanting to get involved attitude was also clear when it came to New Entrants where the second ombudsman confessed the desire to maintain his ignorance of the situation as the Financial Conduct Authority was better placed to investigate the scheme.

Against these FOS contradictions and desire not to get involved, every industry participant knows increasing Claims Experience is a direct consequence of getting older, which entirely concerns Aviva’s Guarantee. So we all know Aviva’s Guarantee is worthless. Yet that Guarantee was the banner under which Aviva launched and continued to sell its Medios product. Also when considering the suitability of the product for our customers we know customers viewed it as a long term commitment – even the second ombudsman “recognised that the product had been “clearly marketed as a long term product” – therefore this is not just about the pricing in any one particular year.

Whilst both ombudsmen relied upon the previous OHRA authority for their judgements that had to be wrong because of the limited authorities to change the policy and to set premium increases set out within Aviva’s 2001 policy offer. The first ombudsman only made that mistake because Aviva’s 2001 policy offer had not been brought to her attention by Mr D, as he was focussed solely upon OHRA due to his past involvement with that separate company. The second ombudsman did that by PRETENDING the 2001 authorities never existed when he misstated that

“With effect from January 2003, Aviva made certain changes to the policy. These changes included the removal of Articles 7 and 8 above (the OHRA authorities from the 1990s) …”.

He sought to make the 2001 policy authorities disappear as though they had never existed and, in so doing, removed all credibility from every view he expressed and caused the Financial Ombudsman Service to be brought into inarguable disrepute.

Financial Advisers cannot continue to promote this product on the back of a Guarantee they know does not work. Also we are aware that Aviva must have lied to FOS when it said ”no part of the premium was allocated to cover the cost of the Guarantee” unless it could show its claims experience had been significantly worse than the industry average. Yet the Sakagawea Team tells us all that papers submitted by Aviva to FOS show that Medios’s Claims experience was no worse, in fact better, than that expected by the Industry. Equally, we are all told by the Sakagawea Team that other papers Aviva submitted to FOS show Aviva lied about its scheme operating at a loss at the relevant time.

NOW FOR THE EVEN BIGGER GOOGLY THAT IS BEING THROWN AT FINANCIAL ADVISERS. We are also all told by the Sakagawea Team that Aviva confessed to FOS that it had been charging for Claims Experience from the very start of its policy in 2001. Assuming that’s the case then Financial Advisers face potential mis-selling claims from every customer that bought into that Guarantee. So that’s over to our PI insurers even if the Financial Conduct Authority gets its act together. Aviva has put all Financial Advisers into jeopardy so we become its victims alongside consumers.

If the Financial Conduct Authority does not act then, just like ethicsman states, Financial Advisers will be forced to conclude that the Authority has approved the product as offering what it promises. For the sake of both the Financial Conduct Authority and all Financial Advisers, I pray the Authority gets its conclusion right, as a very bad smell exists around this product and around Aviva’s actions and, therefore, there can be no margin for error - that’s clearly demonstrated by the huge number of visitors to this web forum, which shows this is an increasingly hot discussion topic amongst many in the financial community.

simon.._2-2

There have been a number of City presentations made by contributors to this Forum. I know that as I attended a second one organised by my organisation.

We were freely provided with various key presentation documents. The most damming was an 08 April 2013 letter from Aviva to the Financial Ombudsman Service’s Assessment Team, redacted solely for the non-disclosure of Mr D’s identity. It did provide very general assurances from Aviva that it had always met the terms of its Guaranteed Loyalty Bonus. Consequently, the first Ombudsman fairly referred to those representations when relying upon them. However, analysis of other much more detailed information from that same letter showed Aviva’s assurances to be absolutely false and unsupportable. That analysis was simple and straightforward as it wholly relied upon Aviva’s own provided figures and upon publicly available Industry statistics. What that also showed was Aviva’s total contempt for the Financial Ombudsman Service’s capability. That contempt was further demonstrated by other easily provable deceptions contained in that same letter. Obviously, Aviva felt it could rely upon the Financial Ombudsman Service’s known desire to accept assurances from CERTAIN industry leaders without challenge or question. Therefore, it was no surprise to learn such naivety had also resulted in the Financial Ombudsman Service extending a private agreement between Aviva companies for one to take the rap for the other, thus effectively preventing the Courts from imposing certain judgements.

The evidence, Aviva introduced with its 08 April 2013 letter, has turned a single wrongful premium increase into a policy that never ever provided protection against Age-Related premium increases, despite perversely guaranteeing to do so. This policy is truly toxic as it entirely misrepresents what it offers. As for Advisers’ exposure to claims, both past and for future premiums, that obviously depends upon what they said and continue to say to their clients. Without doubt, Aviva has put them in an invidious position. If Advisers did not promptly and fully inform their PI insurers about this situation then they must not expect cover.

The second Ombudsman’s mess-up, in not even having the capacity to read Aviva’s 2001 Offer Terms, unfortunately reflects the lack of skills and experience that prevails within the Financial Ombudsman Service. It is a bug bear of many industry participants, as we are often forced to put up with unfairness as presently being experienced by Medios policyholders – with the largest proportion not even knowing the wrongs done to them.

If it provides solace for Forum Readers, the presentation I attended showed all necessary evidence, for relief of their situation, had been submitted to the Financial Conduct Authority. For ourselves, we have much angst concerning the uneven playing field that presently exists and will make that point to the Authority when appropriate.

The problem the Financial Conduct Authority faces is not just the ongoing misleading of clients in continuing sales and ongoing premium charges for a product that delivers nothing it promises, or the past mis-selling that goes back to 2001, or the irrelevant authority from the 1990s wrongly used to degrade the policy, but Aviva’s absolute contempt for the regulatory system - as so clearly demonstrated by the deceptions contained within its 08 April 2013 letter that have been well evidenced by Forum contributors’ submissions.

wallace101

My organisation received a single presentation on this matter, without the attendance of any investment people. Like the previous Poster’s organisation we compete with Aviva and are concerned about a non-existent even playing field. We will make this point to our main liaison official at the Financial Conduct Authority at an appropriate time, as giving Aviva advantage to do what it likes is entirely inappropriate. Our action, and doubtless that of the previous Poster’s organisation, is entirely separate from the policyholder complaint lodged by Forum presenters with the Aviva Team at the Financial Conduct Authority.

The point has already been made that Aviva has turned a wrongful single (but incremental) premium increase into a policy that has NEVER EVER provided protection against Age-Related premium increases, despite Aviva’s guarantee that the policy would do that for life. The fact Aviva’s actions have made the positions of Advisers and PI insurers invidious has also been made. This needs to be understood better by everyone concerned.

In Aviva’s infamous 8 April 2013 letter to the Financial Ombudsman Service’s Assessment Team, Aviva actually declared it had ALWAYS charged for Claims Experience. Yet, as everybody in the world knows or should know, increasing Claims Experience derives from Ageing and Aviva had guaranteed policyholders’ protection from Age-Related increases. In effect policyholders have been charged twice for the same cover. The first time when charged extra for their Guarantee. The second when charged for the actual Claims Experience their Guarantee was supposed to protect them from. Even worse, presenters from your Forum showed and proved that the Aviva Claims Experience, set out and quantified in that letter, was below the Industry average!

This phenomenon of Aviva charging twice might seem incredible. As listeners, we initially had our own doubts. However, they were totally removed by the following Aviva statements from that infamous 8 April 2013 letter (as provided without any wording correction):

- “These prior annual increases have not given rise to concerns relating to the GLB. The 2012 premium increase was consistently applied and did not introduce any new elements to the pricing.”

- “All Medios annual review have been, and continue to be, based on the above approach (the overall cost of claims and medical inflation) and, consequently, are in line with the GLB terms; the 2012 review was no different other than the level of increase being larger than had previously been applied.”

- “As we have outlined above, the January 2012 renewal was no different to any other renewal year (with the exception of the 1% Insurance Premium Tax increase) in that the renewal premiums were calculated in line with experience and medical cost inflation.”

- “As set out above, we used our standard renewal process for a standard annual pricing review. As the basis for the renewal was consistent with all other years, we took the view there was no exceptional activity occurring which would need additional explanation, in the renewal pack.”

- “We believe had we done so (provided additional information), alongside notification of changes to policy terms and conditions, it could have appeared to customers that we were changing terms and conditions of how we set premiums – which was not the case.”

Readers might consider that it was extreme for Aviva to have to repeat this message 5 times in a single letter. However, Aviva had to sell its new story of Claims Experience as the reason for 2012’s premium increase – a belated substitute for the historical under-pricing story rejected by FOS in the previous month. By explaining that Claims Experience had always been charged, Aviva sought to bury the 2012 increase as a standard annual charge that was inarguable on the basis it had always been charged. As we know, Aviva succeeded in that with FOS. But in doing so it forever turned that wrongful single 2012 increase into a product that had NEVER EVER provided the Age-Related protection that Aviva had guaranteed policy buyers for life. There was no turning back for Aviva as it used that about-turn to get itself off the hook in avoiding hundreds of millions of pounds of provisions.

However, changing the product upside down made lies out of other Aviva actions. A Forum presenter gave us every Premium Notice with Explanatory Letter that Aviva had issued to him from 2002 to 2011 inclusive. EACH Notice with its Explanatory Letter showed and proved that EVERY premium increase had been solely for medical inflation. That meant that when Aviva owned up to having always charged for Claims Experience, it was also owning up to having lied to policyholders EVERY YEAR it had sent out Premium notices to them. Apparently, Aviva never thought any policyholder would squirrel away years and years of Premium Notices AND Letters – it mistakenly thought it was safe from being found out.

For a moment I will digress with a comment on the second ombudsman, who we already know was incapable of reading Aviva’s 2001 formal offer and, therefore, never realised it set out terms and conditions for policy changes and premium increases. In his judgement he said:

“Aviva has explained that the sharp increase in 2012 was because of historical under-pricing of premiums. I appreciate this would be deeply disappointing to policyholders and raises questions about Aviva’s management of the scheme.”

Apparently not only did he forget that Aviva had belatedly withdrawn that story as soon as FOS rejected it in March 2013, but he also had not bothered to read Aviva’s 8 April 2013 letter explaining that about-turn. Otherwise he would have known that Aviva had come up with the replacement story of Claims Experience, as the reason for 2012’s premium increase, and, at the same time, had owned up to having ALWAYS charged for Claims Experience. If he had bothered to have read that infamous letter, he would have learnt that the 2012 increase was neither a one-off charge nor an adjustment for under-pricing. If he offered someone help across a road, I would worry for the person he was supposedly helping!

Now back to mainstream issues as readers will want to learn about there having been no boundaries whatsoever to what Aviva was prepared to do or say so as to avoid its commitments and responsibilities.

Within that infamous 8 April 2013 letter, Aviva represented that the product’s marketing material had stated that medical inflation and claims experience would be used to set premium increases. To support that Aviva represented the following as a marketing material extract:

“Will the premiums go up?
There will be a general premium review at the end of each calendar year. Generally the cost of medical treatment increases on a year by year basis and premiums are increased to reflect the overall cost of claims and medical inflations, e.g. availability of new treatments and medical technologies.”

As we know Aviva had come clean with the fact it had always charged for Claims Experience, therefore that necessitated checking the accuracy of that extract against Aviva’s original 2001 policy offer documentation – its first marketing material and probably the only one most Aviva policyholders ever received. We were then shocked to learn that the above Extract was an invention, a fabrication and a deception - as Aviva’s formal 2001 policy offer stated something totally different:

“Does the Loyalty Bonus mean that I will never have an increase in Premium?
Premiums are reviewed at the end of each calendar year. Historically, because generally the cost of medical treatment increases on a year by year basis, premiums are increased to correspond with the cost of claims and other inflationary factors.”

The referenced cost of claims from the 2001 offer wording was clearly limited and linked solely to inflation and, as such, specified as an inflationary factor with other inflationary factors. Apparently, what Aviva did with the marketing extract, contained within its infamous 8 April 2013 letter, was to re-arrange some words, delete some, and add some, so as to deceive and mislead the reader! To try such a staggering deception and risk being caught out could only have been because Aviva was desperate was to avoid its massive commitments and responsibilities!!

As an Industry participant I am thoroughly ashamed. If that had been us I would have expected the Financial Conduct Authority’s Enforcement and Financial Crime Director, Tracey McDermott, to be at our door accompanied by police bearing warrants. Pressure for Board changes or for a White Knight suitor could equally be expected as there is no place within the Industry for a renegade that makes up its own self-serving rules, does not abide by the Principles upon which the Regulatory systems depends, and whose personnel – from top to bottom (also evidenced by Aviva’s own paperwork) - act neither in a fitting nor proper manner.

In owning up to past deceptions Aviva has created even larger ones. It’s symptomatic in every cover-up, where the latest one always needs to be bigger and more brazen than the one before. Also, because of size of the Balance Sheet hit involved this had to go all the way to the very top of Aviva’s organisation – and we were shown paperwork from Aviva’s Holding company that proved it had been involved from an early stage.

On the back of that infamous 8 April 2013 letter, containing one deception after another, Aviva misleadingly weaselled out of the need to make provisions amounting to hundreds of millions. Apparently, Aviva does not care whether that liability is transferred to Advisers and, ultimately, to their PI insurers – assuming full and prompt policy compliance (Advisers you are warned).

I will leave others to reveal Aviva’s further deceptions as obviously the people who presented to us are also making presentations to other insurers they know well.

I have no choice but to endorse and repeat the previous Poster’s view that the problem the Financial Conduct Authority faces is not just the ongoing misleading of clients in continuing sales and ongoing premium charges for a product that delivers nothing it promises, or the past mis-selling that goes back to 2001, or the irrelevant authority from the 1990s wrongly used to degrade the policy, but Aviva’s absolute contempt for the Regulatory system.

PMW2012

Great to see that this is at last being discussed in The City and with interested parties.
Allegedly, AVIVA are still not accepting their is a problem to their brokers with Medios accounts however I am advised that they are arranging to see leading Medios account brokers so I urge all policyholders to ensure their broker/financial Advisor is up to speed with what is going on.
We also need to continue to apply pressure on the FCA who have had this case on their desks now for over two years and, since the FOS's decision have been in a position to take appropriate action with AVIVA since January this year however there is no evidence of this arising so far.
AVIVA, by their own admission, confirmed that "When we took over the book from OHRA, a Dutch Firm, as a result of corporate mergers (Part of what came with the merger with Commercial Union), we did not have the original pricing basis or reports....."
FACT 1 Staff working their at the time for OHRA were taken over or available to speak to about this.
FACT 2 They continued to use the IT system of OHRA's up until 2012 so should have had this information available. As the FOS commented, they were surprised it had taken them over 10 years to realise they had a problem, which does not sound like good management to me?


The Letter to the FOS 08-04-2013 also revealed that the account had been very profitable to them with statistical information contained in the letter showing profits of
2005 15.1%
2006 11.5%
2007 7.3%
I suspect they were even higher in the years 1996-2004.
Losses seemed to start arising when they closed the book in recent years.


AVIVA need now to demonstrate to the FCA that they need to treat customers fairly as there does not appear to be any appropriate evidence of this arising yet in respect of their handling of the Medios account.