Aviva Medios Healthcare - are we being treated fairly?

wozearly

burtwood wrote: »

Much bigger immediate issue is status of current insurance (including wrongly excluded New Entrants), premium level, and whether cover remains available for life.

The Policy issued by Aviva in 2000 was straightforward as are Aviva's subsequently documented shenanigans aimed at avoiding liability.

The "cover for life" issue is easily answered in the new t&cs - there is no longer an explicit guarantee that the Medios product will be around indefinitely.

On the more general points, a lot is going to hinge on what the terms used across Medios' current and historic t&c's actually mean from a legal perspective.

I'm fairly pessimistic that FOS will rule against Aviva on this score, mainly because I'm not convinced that Aviva have broken the rules as they're currently written (I appreciate this is an unpopular minority view on this thread) and I've not seen any pre-2011 wording that shows explicit legal guarantees were removed from the product where Aviva had no right to do so (although as I've seen no rules prior to 2011, that doesn't count for much).

What might cause interest at FSA/FCA/FOS is that if the product was marketed as having fixed guarantees, that's inconsistent with the latest t&cs.

That puts Aviva between a rock and a hard place. If they changed the basis of how the product operated, policyholders can reasonably expect to have this drawn to their attention (which does not appear to have happened). Alternatively, if the product never operated in the way it was promoted to policyholders, that suggests a bad case of widespread mis-selling.

Again, best of luck to those challenging Aviva. Hope you get a positive result.

davidstone

Many share common views on the disgrace that is Aviva.

It might interest others to share proposal to FOS for questions to be put to Aviva.

Collation of these issues might improve appreciation of the strength of case although not any understanding of FSA's invisibility, as others have noted.


1. On the 2002 change to Terms & Conditions when Aviva unilaterally altered its authority



FROM

“We may alter the standard terms of the policy at any renewal date by notifying the Policyholder.”

TO

“The Policy shall be for one year and is continuable subject to the terms in force at the time of each Review Date’.



How does Aviva explain this wrongful taking of extra authority?



How can it be effective as Aviva did not have the authority to grant itself greater powers?



Why did Aviva mislead on the effect through explaining it away as an industry wide initiative?



How also can the change be effective when it contravenes The Unfair Terms in Consumer Contracts Regulations 1999 and, in particular, the Schedule 2 safeguard that applies when “(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract”?



2. On the 2005 change to Terms & Conditions where life-time cover availability was wrongfully stopped. A few words were added to ‘existing ones’ as follows (additional words are underlined):



“The Policy shall be for one year and is continuable subject to the terms in force at the time of each Review Date where the product is still offered by us’.



As stated above, even ‘existing words’ were unauthorised, hence this Aviva action was doubly wrong. Even so, the power to make changes to policy terms was never for the purpose of altering the unique nature of the policy, which was both fundamental to its marketing and policy take-up. Not even the power sought by the unauthorised and ineffective Aviva 2002 change gave Aviva the authority to change the availability of life cover. As for the authority actually available to Aviva (in 2000), clearly its sole focus upon standard terms could not apply to a unique governing feature.



So how can Aviva change one of the most fundamental parts of the insurance when it only had power to change subordinate parts – being solely the standard terms?



And how can the new authority be effective when it also contravenes The Unfair Terms in Consumer Contracts Regulations 1999 and, in particular, the Schedule 2 provision (j) (as detailed above) plus provision “(k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided.”?



3. On non-compliance of above 2002 and 2005 changes with FSA rules, many were broken:

- FSA Principle (PRIN 2.1.1) which stipulates that:

A firm must pay due regard to the interests of its customers and treat them fairly.



- FSATreating Customers Fairly outcomes including:

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

And

Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.



- FSA Principle 7 on Communications with clients stipulates that:

A firm must 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.

Also, the FSA’s Treating Customers Fairly Outcome 3 (that consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale) is developed in its Conduct of Business Rule, ICOBS 6.4.11, that states:

Throughout the term of a policy, a firm must provide a customer with information about any change to:

(b) any term of the policy, together with an explanation of any implications of the change where necessary.



- FSA Principle 8 which stipulates that:

A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.



So how can the 2002 and 2005 changes be consistent with each of the above rules as scant regard was given to customer interests, none to treating them fairly, nonefor product performance to accord with expectations, none to post-sale barriers,and much to misleading and none to adequate information provision.



What Aviva safeguards existed but failed to prevent Aviva preferring its own interests over policyholders in its wrongful efforts to rid itself of massive Guaranty liabilities?



4. The Aviva breach on the stopping of New Entrants in January 2010



How can Aviva breach its fundamental Policy commitment on New Entrants and jettison it without regard for contractual obligation or the above cited FSA rules?



Why did Aviva not comply with above FSA rules when it did not provide and then refused to provide information on the consideration, timings and the effect of the New Entrants’ exclusion?



How does Aviva explain its failure to disclose the cessation of New Entrants to policyholders (it has solely come to light, some 2 years later, as a response to certain enquiries about the 2012 20% premium hike)?



Why did Aviva demand 2010’s premiums without informing policyholders of this fundamental change to its Guaranty, when it must have known it was ceasing New Entrants admissions only days later?



Why did Aviva demand 2011’s and 2012’s premiums on the back of false Terms and Conditions as they showed New Entrants as still alive?



What reasons can Aviva provide to demonstrate that it did not engage in fraudulent misrepresentation when it demanded 2010’s, 2011’s and 2012’s premiums but with-held knowledge about the cessation of New Entrants and misrepresented that situation in the Terms & Conditions sent with each year’s premium advice?



What action does Aviva propose with respect to its Guaranty breach in stopping New Entrants?



5. 2012’s 20% premium hike not in accord with Guaranty



Aviva needs to quantify each component part of 2012’s 20% premium hike?



Why should policyholders pay for the impact of Aviva’s Guaranty breach in stopping New Entrants and why, instead, should not Aviva pay out the full value of policyholders’ Guaranties as a result of its Guaranty breach?



Why should policyholders contribute to the cost of Aviva’s Guaranty as it took on that cost to attract new business?



What reasons can Aviva provide to demonstrate that when demanding and collecting the 2012 premium (with the representation of it being proper and correct when challenged), such action did not constitute fraudulent misrepresentation.



6. Refusal to provide Guaranty value information



The FSA’s Conduct of Business rules (ICOBS6.1.5 to 6.1.11) make clear that a customer must be given appropriate information about a policy in good time and in comprehensive form so the customer can make an informed decision about the arrangements proposed.

That rule reflects the FSA’s Principle 7 that “A firm must 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”.

So when Aviva tells customers they should contact it directly about a cheaper alternative product (as occurred with 2012’s renewal), why does Aviva think the Guaranty value is not needed so customers can make an informed decision?



Why is Guaranty information commercially sensitive (non-disclosure reason) for a product that has not been sold since January 2010 and where there is no like competing product in this country?

And whatever reason is given, why should that take precedence over the FSA requirement to provide information so customers can take informed decisions?



Also, how does Aviva’s refusal to provide that crucial information accord with the FSA’s Principle 8 to manage conflict of interests fairly?



What is the value of our Guaranty, how has that been computed, and how is that value shown in Aviva’s Financial Statements?



In Aviva’s Healthier Solutions Terms & Conditions (the alternative cheaper policy Aviva was pushing) policyholders needed to “ask for written confirmation of cancellations due to the potential loss of benefits to you in doing so. You are advised to call our CustomerService Helpline to discuss your options before taking this step”. However, the opposite was the case with the Medios policies even though the Medios benefits were as gold is to nickel when compared to the Healthier Solutions benefits.How does Aviva explain this inconsistency?



7. Wrongly causing policyholders to relinquish their Guaranty

How did Aviva comply with its FSA obligation to provide information so informed decisions could be made and how was that compatible with Aviva’s refusal to provide Guaranty information?



What reasons can Aviva provide to demonstrate it did not engage in fraud when it pushed a cheaper policy that meant policyholders lost a much more valuable Guaranty (that benefit going directly to Aviva) as Aviva failed to disclose Guaranty value, in accordance with its duty, and even refused to do so if asked?



8. Lack of integrity

How does Aviva reconcile its foregoing actions with the FSA’s Principle 1 rule that “A firm must conduct its business with integrity”?

Barrynk

I know this is slightly off topic, but it's about Aviva. I joined their Select Care scheme in 2000, coming away from Standard Life, whose no claims discount (NCD) was becoming more and more expensive each year.

In 2010 I was switched to the 'Healthier Solutions' NCD scheme and I commenced £3782 pa., which included a 38% NCD.

In 2011 my fees were £3049 pa., which included a 44% NCD because I had gone over to a £500 excess to keep the costs down.

I have just received the renewal for this year, and I am horrified at the increase; £5396 pa including a 24% NCD.

The NCD is obviously designed to stop people making claims, which is crazy. if you have a problem you need to claim. I warn anyone that has been offered Healthier Solutions to keep away from it.

I went online to the Aviva website and did a new enquiry, the monthly payment came out at £185, compared with the £449.98 they want me to pay now.

I will complain, but I know it will get me nowhere.

mwng

You really need to complain - it is so easy - just write them and when they give you their usual line of prevarication about not budging, call the Financial Ombudsman.
Aviva are clearly out of control. The more people who nail them at the FOS, the more likely they are to behave in the future.

wozearly

Barrynk wrote: »

I know this is slightly off topic, but it's about Aviva. I joined their Select Care scheme in 2000, coming away from Standard Life, whose no claims discount (NCD) was becoming more and more expensive each year.

In 2010 I was switched to the 'Healthier Solutions' NCD scheme and I commenced £3782 pa., which included a 38% NCD.

In 2011 my fees were £3049 pa., which included a 44% NCD because I had gone over to a £500 excess to keep the costs down.

I have just received the renewal for this year, and I am horrified at the increase; £5396 pa including a 24% NCD.

The NCD is obviously designed to stop people making claims, which is crazy. if you have a problem you need to claim. I warn anyone that has been offered Healthier Solutions to keep away from it.

I went online to the Aviva website and did a new enquiry, the monthly payment came out at £185, compared with the £449.98 they want me to pay now.

I will complain, but I know it will get me nowhere.

From memory, Aviva's new business customers tend to come in at between 50% - 66% NCD (the maximum is 75%), which would explain the difference between the £185 and £450.

The vast hike in premiums for you at renewal is heavily linked to the NCD scale. Its the big, not-necessarily-well-explained downside to having an NCD scale with high number and big gaps between the points on the scale.

It becomes clearer if you look at the base price (ie, what you would pay at 0% NCD).

For the £3,049 premium at 44% NCD, the base price is £5,445. Your current renewal quote of £5,396 at 24% NCD has a base price of £7,100.

That's an increase in the base price of about 30%, which is very high for the industry (3-4 times what you'd normally expect to see as an annual increase). What makes it worse is that your claim whacks a further 20% of the new price onto your premiums due to the drop in NCD scale.

There are providers that don't operate NCD scales - Bupa, WPA and SimplyHealth spring immediately to mind. You'll probably lose cover for the condition that you made the recent claim for if you switch insurers - but with prices like £5,400 being thrown around, its definitely worth ringing around and getting an idea of what your options are.

Lawton

The Minister agreed to take-up case.

He considered same submission emailed to FSA on 20 January and forwarded to FSA team supervising Aviva on or about 7 February.

Minister determined that action was appropriate.

He took best possible action (not available to us) and, presently, awaits response.

I learnt this yesterday when I followed-up my request.

To mwng: I have not asked Minister for permission to use his name and do not intend to do so at this stage

mwng

Lawton - this sounds good.
Er...which Minister would that be?

mwng

hmmmm.......

02Jim

Exeter Friendly Society had a similar health Ins product which i looked for & appears to no longer exist. Does anyone know what's happened to it & it's policy holders?

wozearly

02Jim wrote: »

Exeter Friendly Society had a similar health Ins product which i looked for & appears to no longer exist. Does anyone know what's happened to it & it's policy holders?

It closed to new business a few years ago, but still exists and still has policyholders on it.