Aviva Medios Healthcare - are we being treated fairly?

weejonnie

I am an insurance broker who sold the OHRA Medios (And Medios 2000) policy many years ago - one key point was that there were to be no age related (or in the case of the 2000 policy only one age related claims).

The problem is that this was like a Ponzi scheme - only the fresh influx of younger people paying slightly over the odds could compensate for the ever increasing age of the clientele - and the result is, as you can see, that overall prices now have to increase as there is no 'new blood' to keep the premiums stable. Indeed it has been known for many years that the price increases on such contracts are higher than on age-related PMI policies.

People who were 30 and hence in the 30 - 39 age bracket are now 40 and there are no new 30-39 year olds - so the premium for 30-39 year olds now has to reflect the fact that everyone in the bracket is now 40.

I do not believe that the FOS will uphold a complaint purely because the price for your age at inception has gone up by 20% - especially as insurers are under the spotlight to ensure all policies are underwritten prudently. They may uphold the complaint if the literature was faulty - but if your policy was incepted before 2005 then you may have difficulty here.

Regrettably as there are no new incomers (to keep the average age in each age group the correct value) this increase will continue exponentially.

It is probably of no consolation to you but exactly the same reason is the cause of many 'whole of life' pet insurers pulling out of the market - there are insufficient new young pets coming in to cover the extra costs of the old ones.

I don't deal with PMI now.

davidstone

The narrative provided by weejonnie is intended to be helpful but unfortunately is inaccurate.

In fact there are 3 types of Medios policy.
Medios Healthcare has 1 Age Related Increase for the Age Band following policy inception. Medios Executive Plus and Medios Optional offer Age Related Protection on policy inception. Also Medios Healthcare was not first issued in 2000 but years earlier.

Another chunk of relevant missing history is OHRA’s origins as a health care provider for senior Dutch civil servants; an important insight as it was illegal to have health premium increases for old age in Holland, hence the resulting rigid policy structure. None of that was even influenced by CGU before its 2000 merger with Norwich Union. That’s because OHRA formed part of NUTS OHRA Management and that company only got involved with CGU in 1999 when it merged with a CGU subsidiary (Delta Lloyd) in 1999. Many of us purchased our policy years before any CGU involvement.

The rigid Dutch structure adopted by OHRA went beyond excluding Old Age Increases and excluded Age Related Increases. Also policy cover was available for life. In addition, ongoing New Entrants formed a crucial part of the Guaranty. All this is set out in the Aviva policy circulated in 2000.

No wonder Aviva did not want to tell policyholders that it stopped New Entrants in January 2010 as that would have alerted them to the attack it was making on their Guaranty; that attack concerned the 2005 change (negating lifetime cover) Aviva improperly made to Terms & Conditions.
Besides not communicating that January 2010 Guaranty breach, Aviva then represented the ongoing relevance of New Entrants in its Terms & Conditions for 2010, 2011 and 2012.
Such act seemingly contravened the Misrepresentation Act 1967 (which doesn’t require proof of fraud) and as such Aviva is at risk of repaying all those premiums to policyholders.

Not alerting policyholders to its attacks on their Guaranty was time related. Assuming the improper aspect of the 2005 Terms & Conditions change remained undiscovered, then that 2005 change could not be challenged after January 2011 as any such challenge would then become statute barred. That would allow Aviva to stop the policy for 2012 and force policyholders to transfer to a Healthier Solutions Policy. A 2012 stop date also meant no Medios Healthcare policy sold by Aviva (ie from 2001) could ever benefit from the Guaranty due to the Age Band qualification period not expiring until at least 2012.

The only change to that apparent Aviva 2012 plan was to substitute a 20% premium hike for stopping the policy in or around October 2011. Apparently, Aviva thought the premium hike would cause policyholders to get the message and thus avoid any greater outcry from stopping the policy.

It’s because of the above, that weejonnie is so wrong in his conclusion.
His mistake is to claim that New Entrants are crucial and then to miss that they form a vital part of the Guaranty.

Even Aviva has accepted in writing that its 2012 premium was for costs covered by its Guaranty.
However, that loss is insignificant compared to the loss of lifetime Guaranty caused by Aviva’s improper 2005 and 2010 attacks. Also a loss exists for the inability to obtain alternative cover for existing conditions.


The main surprise in weejonnie’s comments is his attempt to defend a civil claim with confession to the criminal act of Ponzi selling; rather like being sued for £100 and the Defendant offering £100,000 to settle!

Wutang_2

Is this thread actually going anywhere? Theres a lot of talk (MPs! FOS! Court Action!), or are they the same points being reworded over and over again?

and so to summarize...........?

Guardog

Actions in a dispute do not all go electronic, Wutang.
Your commitment to the Forum provides instant gratification as does the internet generally.

Discourse between relevant MP, the FSA and relevant Poster involves 3 parties.
Defining strategy, convincing MP and correspondence between MP and FSA must all take time.
Apparently the MP assisting policyholders is a Government Minister so his time is constrained.

FOS is at least 3 months behind in dealing with a back-log of cases, so complainants must be patient and await the appointment of an Adjudicator. Even then, FOS will seek more information when the parties fail to compromise (as seems likely) and only then (after an interval of another 3 months or so) will an Ombudsman start the judgement process.

Legal investigation takes more time and involves external professionals/prosecutors and one must go at their pace – legal issues never occur in an instant.

New people come to Forum and rightly want to state their ideas and fears.
Some might be right and others might be wrong but they all deserve the opportunity to put their point and to obtain feedback from others - that’s the purpose of the Forum.
Even existing Forum users keep improving their knowledge of the Aviva toxicity as more and more information/research seeps out.
Other users need time to realise how worthless their policy has become because of the toxicity that is Aviva.
Also not everyone catches on in an instant and some of issues are not straightforward. Consequently, interested parties might need to read and re-read them before they’re understood, especially if those parties are not industry participants.
A big positive is that some big-hitters appear to be participating in our Forum discussion which doesn’t often happen in other Forum discussions.

The Forum enables people that will not necessarily complain to obtain confidence to do so.
That’s important as they’re not likely to obtain compensation unless they do complain.
For those policyholders requiring a template for making a complaint, that will be forthcoming.

weejonnie

davidstone wrote: »

The main surprise in weejonnie’s comments is his attempt to defend a civil claim with confession to the criminal act of Ponzi selling; rather like being sued for £100 and the Defendant offering £100,000 to settle!

I am not defending any civil claim - I am merely pointing out that the underwriting of this product (like whole of life pet insurance) was, with hindsight, fatally flawed.

davidstone

The problem, weejonnie, is that a lot of people are not just suffering financial loss but are worrying about future cover, especially for existing conditions unsuited to policies offering high discounts for no claims (such as Healthier Solutions).

Consequently, when an Insurance company makes an incorrect risk call and then wrongly seeks to jettison its liabilities there is a harsh reaction.

Only through misbehaviour, rule non-compliance and law breaking could Aviva rid itself of the rigid Dutch policy structure.
Equitable Life acted equally badly to rid itself of its Guaranteed Annuity Rate liabilities and we all know how that ended!

Guardog

Policyholders wishing to complain and seeking template complaints might wish to consider the following.

Letter to Aviva (as only when unsatisfactory response received can complaint be made to Financial Ombudsman Service)

Aviva Health UK Limited
Templars Way
Eastleigh
Hampshire SO53 3RY [Date]

Dear Sir/Madam

Policy Number: [ ]

The 20% premium increase for 2012 was a shock. Consequently, I request an explanation for such a large increase. Please also confirm, with further explanation, that no part of the increase relates in any way to matters covered by the Guaranty.

As a result of the shock premium increase, I have reviewed my policy documentation. I am particularly dismayed to discover that availability of lifetime cover seems to have somehow disappeared and would be grateful for an explanation.

Due to that discovery, I also request confirmation that the New Entrants’ provision in the Guaranty remains and please also confirm that no action has been taken to impact upon New Entrants.

Please treat this letter as a Complaint as the above matters cause immense distress.

Yours faithfully

[name]

Letter to Financial Ombudsman Service

Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR [Date]

Dear Sir/Madam

Complaint against Aviva Health UK Limited with respect to Medios Policy Number [ ]

I first purchased the above Health Care Policy in [date of inception]. It provided the following essential characteristics:
- a Guaranty of only one Age Related Increase when reaching the next Age Band after joining;
- continuing New Entrants for determining the one Age Related Increase;
- availability of lifetime cover.

Those characteristics were crucial to the policy’s marketing and to my purchase. The resulting premium was considerably higher than alternative health care because of the policy’s essential characteristics.

Following the above policy purchase, there was a change in insurer ownership; the new owner was Aviva. That change occurred in 2000 and Aviva distributed a new policy, at that time, which clearly re-stated all the above essential characteristics.

In the current 2012 policy year, Aviva increased my premium by 20%. It made no sense in relation to the Guaranty. That alert caused my review of policy documentation and I was amazed to discover the availability of lifetime cover had been removed. I also subsequently learnt that New Entrants had been stopped. As for the 20% premium increase, I learnt that it included matters covered by the Guaranty, which should not have therefore been charged.

The stopping of New Entrants by Aviva occurred in January 2010 and was obviously known about and planned when Aviva collected my premium for that year. However, Aviva did not then communicate its wrongdoing. Worst still, Aviva knowingly misrepresented the New Entrants’ situation in its Terms & Conditions for 2010, 2011, and 2012, as Aviva showed them as continuing in connection with the determination of the one Age Band premium increase. Obviously, I would have challenged the situation at that time if Aviva had informed me of its Guaranty breach; I would have continued my policy only to protect my rights. Knowing then about that breach would also have alerted me to review my documentation and that would have led to the earlier discovery of Aviva’s removal of lifetime cover.

I have complained to Aviva and enclose a copy of Aviva’s unsatisfactory response to my complaint (copy also enclosed).

The above removal of almost all the policy’s essential characteristics means I have lost my Guaranty and I claim for:
- the value of that lost Guaranty;
- the premiums for 2010, 2011 and 2012 (including the element of 2012’s premium increase covered by the Guaranty) as I would not have continued my policy other than to protect my rights;
- [ongoing health care cover at no cost from Aviva for existing conditions I am unable to obtain cover for (I am aware such cover might be available if I exchanged my current policy for Aviva’s Healthier Solutions policy but am concerned that it does not meet my needs as its premium is geared to no claims being made)];
- distress and inconvenience.

Yours faithfully

[name]

Letter to FSA
We need to await Lawton's and his MP's reaction to FSA's current response.

02Jim

Guardog, when I took my insurance out with OHRA in 1999 I don't think there was anything in the policy about 'one Age Related Increase when reaching the next Age Band'. Is that something that has been added by Norwich Union or Aviva?
I wrote a complaint to FOS on 25 March & have only just received a letter back from them but with a complaint form to fill in! I can see this is going to be a slow business. You can download this form from their web site which might save some time.

Guardog

A feature of the Medios Healthcare policy is the One Age Related Increase – it’s not an add-on by Aviva although your question is fair, given present circumstances.

As Davidstone said, in his 30 April posting, there are 2 other Medios policy types – being Medios Executive Plus and Medios Optional. For both those policies types there is no Age Related Increase whatsoever as they provided instant protection (from Age Related increases) the moment they were taken-out.

If your recollection is accurate then the concern would be that you have been subsequently moved to a Medios Healthcare policy after taking-out one of the other two Medios policies. All you need to do is to look at prior documentation. Identifying what occurred should be straightforward as the names of the different Medios policies are on the front page of Terms & Conditions.

Medios Executive Plus and Medios Optional policyholders need to amend the supplied complaint letter examples by deleting comments on New Entrants; that also includes deleting the 2010, 2011 and 2012 premium elements of the claim (other than the wrongful increase for 2012).

Completing the FOS complaint form should be straightforward as only policy details and advisor information are required, other than for an answer with respect to “what your complaint is about”. That complaint explanation can be a reference to an enclosure, which can be the complaint letter example.

Other complainants submitted their complaints in January, so you are right it is a slow process. Little can be done about process timing unless the FSA shortens it through regulatory action; something Lawton and his MP are striving to achieve.

02Jim

Thanks for that. Yes, I have Medios Executive Plus so no age related increases at all. Having spoken on the telephone to the FOS a couple of times, they apologised for their delayed response & say they are overwhelmed with complaints at the moment.