Health insurance cash plan mis-sold.

Good day,   I recently found that my father had been paying for a cash plan insurance policy for the last 18 years.     My father is not an "admin" "paper person" and does not look at his bank statements.     When we contacted the company to see what the direct debit was they couldn't find any detail on the policy.   We were requested to send a screenshot of the debit from his statement.    It seems that they do not have any copies of the original agreement and no information as to how it was sold or who sold it to my father.    The policy has changed administrators on 3 occasions.    

I personally believe that if there is a financial contract ie someone is being paid money the original document should be retained.    The company have advised that due to GDPR rules they are not able to keep the information.    

I believe the policy was mis-sold to my father as it is a cash plan where you need to retain receipts, fill in a form and send them off to the insurance company in order to be reimbursed.    That is not something my father would do.     I accept that he has responsibility to check his bank statements but would also expect the company who receives the funds to have some kind of policy information.   The fact that he doesn't look at his bank statements only lends weight to the fact that he was unlikely to ever collect receipts, fill forms in and post items off.      

Is it true that they have no obligation to retain original information if the policy is still in force?   


Replies

  • DullGreyGuyDullGreyGuy Forumite
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    Rules, regulators and practices have changed a lot in the 18 years that they've had the policy! It wasnt until 2011 that the idea of having something like GDPR existed.

    Cash plans are almost exclusively bought on a non-advised basis and so are very rarely "miss-sold" and much more commonly "miss-bought". The sales person only tells you the features of the products and you have to decide for your self if it'd be beneficial for you. You would also be way beyond the timescales for any complaints about the sales process. 

    Most insurers would like to keep records for 6 years after the date the policy lapses however keeping paper records are complex if not digitised and certainly in 2004 many records werent. You send boxes of forms off to storage and some will cancel in 6 months, some in 6 years and some will still be in force in 40 years. 

    GDPR requires all companies to not keep data longer than they need to and so there are certain tensions... do they keep the box of 500 application forms from 17 years ago in case one is still live? Digitizing and indexing them all would be vastly costly exercise. Most are more likely to take a risk based approach so if the average policy term is 3 years then set each box to be destroyed after 12 years.

    The company should have some form of policy information but that doesnt mean it has to include who the seller was (their commission, if any, ended long ago) or the distribution channel. The info they will need is items appropriate to know the T&Cs of the policy... in a simple company that could be as little as knowing the start date of the policy if there were no options around limits, excesses etc and the generic policybook that was in force at that time. 

    PS. I dont think the Mrs has ever looked at her bank statement but her handbag is stuffed full of receipts... it doesnt follow that statement reviewing and receipt keeping are linked activities.
  • edited 12 January at 3:23PM
    NearlyoldNearlyold Forumite
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    edited 12 January at 3:23PM
    LGF1804 said:
    Good day,   I recently found that my father had been paying for a cash plan insurance policy for the last 18 years.     My father is not an "admin" "paper person" and does not look at his bank statements.     When we contacted the company to see what the direct debit was they couldn't find any detail on the policy.   We were requested to send a screenshot of the debit from his statement.    It seems that they do not have any copies of the original agreement and no information as to how it was sold or who sold it to my father.    The policy has changed administrators on 3 occasions.    

    I personally believe that if there is a financial contract ie someone is being paid money the original document should be retained.    The company have advised that due to GDPR rules they are not able to keep the information.    

    I believe the policy was mis-sold to my father as it is a cash plan where you need to retain receipts, fill in a form and send them off to the insurance company in order to be reimbursed.    That is not something my father would do.     I accept that he has responsibility to check his bank statements but would also expect the company who receives the funds to have some kind of policy information.   The fact that he doesn't look at his bank statements only lends weight to the fact that he was unlikely to ever collect receipts, fill forms in and post items off.      

    Is it true that they have no obligation to retain original information if the policy is still in force?   


    The fact that your father might be disinclined to do something in order to proceed with a claim that he is presumably perfectly capable of doing should he choose to do so does not mean the policy was mis-sold. 

    I've never been asked when taking out insurance whether I'm capable of filling in forms and posting them off and wouldn't expect to be, and if I was asked I think I'd find it incredibly patronising. 
  • dunstonhdunstonh Forumite
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     It seems that they do not have any copies of the original agreement and no information as to how it was sold or who sold it to my father. 
    Probably as they never sold it.   If they were not involved in the sale they would have nothing on file to say how it was sold.


    I personally believe that if there is a financial contract ie someone is being paid money the original document should be retained.    The company have advised that due to GDPR rules they are not able to keep the information.    
    GDPR requires destruction of unnecessary paperwork.   Applications are often kept but they are usually kept by the seller.  Nowadays, with digital scanning, document copies are much easier but back then, things would go in boxes and sent off for storage and 99% of them never see the light of day again.  Those boxes over time would fall apart and be pushed around and disintegrate.  And then when GDPR came in, just like in the 90s with the DPA, firms went over the top destroying data that they felt was unnecessary.   I was just a clerk back then in the lead up to that and we were deleting and destroying all sorts of useful records that in hindsight didnt need to be destroyed.  History repeated itself with GDPR.

    I accept that he has responsibility to check his bank statements but would also expect the company who receives the funds to have some kind of policy information.
    A lot of insurers have multiple offices and run certain types of policy out of an office that another would not have access to.     

    Is it true that they have no obligation to retain original information if the policy is still in force? 
    Yes it is true for the period in question.  Insurance was not regulated until 2005.  18 years ago is vague but a pre 14th Jan 2005 sale needed little more than an application form to set up. And it was possible to set these plans up non-advised.   

    Many of these cashplans were sold by banks. But a significant number were sold via magazine and newspaper adverts where the person filled in the slip on the advert and it was set up from that.     It was very common back then for someone in a manual trade to buy them this way.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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