Insurance Cancellation, the lifetime sentence

GingerBob_3

On this forum and elsewhere we are often told that if you are unfortunate enough to have an insurance policy cancelled then you MUST declare the cancellation for the rest of your life whenever you apply for insurance. If you don't, it could be fraud.


I've always considered this a somewhat harsh sanction, even if the forced cancellation is because of fraud - people do mend their ways.


So is it actually the case that you MUST declare cancellations for life, what happens if you don't, and how is the situation monitored and policed?


I can't recall the T&Cs of the last insurance I took out, but anecdotal evidence from this board suggests that you are invited to make such a declaration - "have you ever had insurance cancelled ...." whenever you apply. Fair enough. This requirement implies that if you do have insurance cancelled, a record is kept somewhere, and it's kept "for life". I asked fellow contributors about this, thinking that some of them work in the industry :


https://forums.moneysavingexpert.com/discussion/comment/71037909#Comment_71037909


For reasons best known to themselves, they didn't reply.


Maybe they are just obdurate, maybe they don't know, or perhaps they do know but are loathe to answer because of some irrational feeling that they would be giving away trade secrets. Anyway, not to worry, some Internet research has, I think, delivered the answer. Read on!


Having insurance cancelled could be because the insurer thinks you've acted fraudulently. If this is the case he can record the fact on the


INSURANCE FRAUD REGISTER


This little-known database is an industry-wide "solution" :rotfl:to that evil of all evils, insurance fraud. It's run by the Association of British Insurers; here's a link to some information about it:


http://www.theifr.org.uk/en/about/


Of course as you might expect, this website is choc full of obfuscation, self-congratulation and downright lies. Here's a classic:


"More than £2.1bn of undetected insurance fraud is committed every year."


Anyone see a problem with that assertion? Well, they are brazen enough to put it right up front on page 1. If anyone is missing the point, the 2.1 billion figure has been obtained from a random number generator.


Anyway, to cut to the chase, records are held on this database for


FIVE YEARS


So, assuming insurance cancellations are recorded, they drop off after five years. Yippee! This ties in with similar big brother databases where records must be removed after five or six years. CRA files and the Trust Registry immediately come to mind in this respect. The IFR is regulated (probably not effectively) by the ICO, so they are no doubt the ones who've insisted on the five-year limit. The insurance industry would obviously want indefinite record keeping.


If you've been hit with a cancellation, what can you do, and do you really have to declare it for the rest of your life? Make up your own mind. I couldn't possibly advise you


What precisely are the criteria for being put on the IFB? Well there's a surprise; they don't tell you. This is what we get:


"There is a clearly documented set of rules applicable to loading any data to the IFR, which sets out what can and cannot be loaded by insurers. Compliance with these rules are strictly mandatory for all users. The Information Commissioner's Office has been made aware of the criteria and has not raised objections." So - what are they then. Further investigation required here, unless some insider can spill the beans.


One final thought; there's no such thing as "your" insurance record, which could attract black marks in the same way that the CRA blacklists can. If you make a claim it will be recorded on CUE, and if you're fraudulent, it will be recorded on the IFB, but both these databases relate to incidents, not individuals.


Happy insuring!




PS: want to find out if you're on the IFR? Smack them up with SAR. It'll cost you a tenner (needles to say, they may record the fact that you've done so!).

TSx

I agree with you in principle - it is unfair that a cancelled policy leads to a lifetime of higher premiums.

That said, the IFR records details of proven fraud. It is not a database of cancelled policies.

Other than that, National Hunter may record details of this - I am not sure, I've never worked with them.

A previous post of mine on a similar theme, some of which is relevant

SIRA from Synectics Solutions - is another one.

Some insurers don't subscribe to CUE so don't publish claims onto there. There is also a lot of sharing which goes on between companies in the same group (e.g Direct Line and Churchill will share data).

There are also claim investigation companies who hold their own databases - e.g G4S Investigative Services who record data from their various insurance clients in a centralised database. They are likely to only have been given your data where there is a claim made. In fact, any supplier who deals with multiple insurers will likely be able to cross-reference their records for previous claims, e.g loss adjusters, solicitor or repairers.

To be certain of who has information about your previous policies and claims, you need to approach your previous insurers and ask who they shared the information with.

edit: There's also the motor insurance database which would show any previous insurance based on the registration - from there it's a relatively straightforward task for the insurer to ring the companies involved to find out what information they hold about the policy.

In terms of loading data, the usual requirement is that there is enough evidence to prove that on the balance of probabilities, fraud has been committed (the burden of proof in a civil court)

ACG

Its not the same as General insurance (ie home and car) but when I worked for a life office, it asked if you have had a policy cancelled or declined. However answering yes to that question was not a reason to increase the premium/decline cover. They just wanted to ensure they had not missed out on something.

GingerBob_3

National Hunter has a six-year data retention period. I can't find out about SIRA, but one would assume they have limits imposed on them. It's unclear from their website whether they deal with insurance fraud at the policy cancellation level.

huckster

I don't believe there is a lifetime requirement to advise of every cancellation, as that would be more stringent than criminal convictions which are covered by rehabilitation of offenders act.

Insurance declarations don't specify a time period for cancellations, because i don't think it has been considered in terms of any legislation that applies. But given that Data Protection requires some data to be removed after 6 years, i can't see any database having reliable information beyond 6 years.

What cancellations would Insurers want to have recovered permanently on any database ? If a claim is found to be fraudulent then the Insurers should involve Police and look to gain a criminal prosecution. It then would go on the fraud database and be subject to rehabilitation of offenders act rules.

GingerBob_3

huckster wrote: »

I don't believe there is a lifetime requirement to advise of every cancellation, as that would be more stringent than criminal convictions which are covered by rehabilitation of offenders act.

Insurance declarations don't specify a time period for cancellations, because i don't think it has been considered in terms of any legislation that applies. But given that Data Protection requires some data to be removed after 6 years, i can't see any database having reliable information beyond 6 years.

What cancellations would Insurers want to have recovered permanently on any database ? If a claim is found to be fraudulent then the Insurers should involve Police and look to gain a criminal prosecution. It then would go on the fraud database and be subject to rehabilitation of offenders act rules.

Agreed. The question. "have you EVER had insurance cancelled..." is manifestly unfair and might not stand up to a legal challenge.

Quentin

huckster wrote: »

..... i can't see any database having reliable information beyond 6 years.

In order to ensure no shared database kept the details would mean not making any applications for 6 years. (Assuming anything detrimental you disclose is added to the database)

That still wouldn't mean you weren't caught out lying if you approached an associate insurer who used internal records etc.

huckster

GingerBob wrote: »

Agreed. The question. "have you EVER had insurance cancelled..." is manifestly unfair and might not stand up to a legal challenge.

This has been discussed on here on numerous occasions. Because Insurers are cancelling more policies these days, i think it should be looked at as an issue by ABI/FCA and parliament.

Some people are viewing this indefinite period as a black/white requirement and ending up going to brokers buying more expensive policies. This should really only be applicable to those people who have committed a criminal act or have been found out by Insurers to have told deliberate lies or have made a massive error in misrepresenting a risk, where they are seen as not being reliable in taking out Insurance on a proper basis.

I can remember a few policies i have cancelled/voided because following a claim it has been found that a risk was very different to what was disclosed at inception. Because the underwriters would never have issued the policy had they known the true position, it was reasonable to void the policy. I then had to issue letters explaning the situation and they could pass the letter onto brokers/insurers for information when arranging new cover. The voidance would be noted on the Insurers database and CUE, but not on any other database at the time.

huckster

Quentin wrote: »

In order to ensure no shared database kept the details would mean not making any applications for 6 years. (Assuming anything detrimental you disclose is added to the database)

That still wouldn't mean you weren't caught out lying if you approached an associate insurer who used internal records etc.

Insurers have to be careful accessing old records as to what they can use.

The normal FCA rules would apply anyway in regard to being fair etc.

dacouch

huckster wrote: »

This has been discussed on here on numerous occasions. Because Insurers are cancelling more policies these days, i think it should be looked at as an issue by ABI/FCA and parliament.

I thought there was talk of bringing in a limit a couple of years ago as rumour had it that the DL group prempted by just asking for cancellations in the last five years

Retrogamer

Quentin wrote: »

In order to ensure no shared database kept the details would mean not making any applications for 6 years. (Assuming anything detrimental you disclose is added to the database)

That still wouldn't mean you weren't caught out lying if you approached an associate insurer who used internal records etc.

So if the cancelled policy was showing on that database for someone and they never applied for or held insurance for 6 years then if they applied after that period and never declared the cancellation no one would know?