Bank withdrawing services

MKHere

Hi
My bank (Barclays) have written to me to say they are no longer offering the service I have paid into them for the last 15 years for Income and sickness cover.  Also, this was taken out pre a medical condition (not serious) but now to re take out (in my 50s and declaring the condition) will cost me more each month. Can they just withdraw a service like that, what about all the money I've paid in already?
thanks in advance for any help and advise on this

dunstonh

Can they just withdraw a service like that, what about all the money I've paid in already?

The insurer cannot cancel proper income protection, called permanent health insurance.  Hence the "permanent" in its name.

However, it sounds like you don't have that but hold PPI instead.   PPI has no permanent requirement and actually renews each year.   It is effectively pay-as-you-go insurance.     The length of time you have held it doesn't matter.   You pay the premium and you are covered that month.     

The insurer is entitled to cease offering PPI if they wish and its known that Barclays have just done this with their PPI insurer.

 

MKHere

Thank you, I will double check that, so if they were taken out together, which was my understanding (but that was a long time ago now) its on the Income protection thats cancelled?

dunstonh

MKHere said:

Thank you, I will double check that, so if they were taken out together, which was my understanding (but that was a long time ago now) its on the Income protection thats cancelled?

If PPI and PHI were purchased together then it is still two individual products.   The PHI cannot be cancelled but the PPI can.

PPI suffered with the PPI misselling.  Whilst regular premium PPI was not considered a bad product, the FCA did think about not including it in their PPI review but only did so because they thought not doing so would add confusion,  the problem was that all types of PPI became tarnished by name association.   

Plus, every time there is a recession or fear of recession, the reassurers get cold feet and make it more expensive or pull out.  And that leaves the insurers with a problem that more often than not means they pull out too.  Which in turn leaves the retailer (Barclays in this case), no product to offer or find an alternative.    As PPI isn't popular, finding an alternative isn't worth it.  Banks have mostly moved on from their sales days and dont need products like this any more.

DullGreyGuy

MKHere said:

Hi
My bank (Barclays) have written to me to say they are no longer offering the service I have paid into them for the last 15 years for Income and sickness cover.  Also, this was taken out pre a medical condition (not serious) but now to re take out (in my 50s and declaring the condition) will cost me more each month. Can they just withdraw a service like that, what about all the money I've paid in already?
thanks in advance for any help and advise on this

There is a desire on this site to call it PPI because of the toxic association to the miss-selling scandals however PPI is also known a Accident, Sickness and Unemployment (ASU) - it can be sold as all three, the first two or the last one.

Call the product whatever you want, marketing companies these days call it income protection to avoid the toxic PPI association, it is ultimately a form of short term insurance. Most are annual policies and therefore the insurer can simply decide not to renew it whenever they like. 

PHI, which is the full fat version of income protection/AS, is a form of long term insurance, normally a single policy until your 65th birthday or whatever date you chose. As such the insurer cannot cancel it mid term other than for obvious problems like non-payment or fraud.

ResearchGuru

I am in a similar situation, having been part of (as people above) the now closed portfolio of Income Protection Insurance.  I took out my IPI in November 2010.  The product became 'closed to new retail customers' in 2012 and was 'sold off' to Monument Insurance DAC in 2017.  Both publicly (Irish Times and on their own website) Monument Insurance stated that they would continue to honour this closed portfolio product.   The T&Cs only state  their right to cancel individual policies, no where does it state that they have a right to withdraw this product in its entirety.  Also, within their T&Cs, p.19, Section 7c, they state that they will give 60 days notice of any changes.  Yet they notified me (letter dated 9th May, received via post on 11th May) that they are withdrawing it on 30th June.  This is not 60 days (another breach of contract).  I have of course, complained direct to Monument insurance (digital trail) via email (an email address hard to get, most likely deliberately) and also escalated this matter to the Financial Conduct Authority (FCA) who have investigated my complaint and lodged an official case number.   If others impacted (similar to myself) wish to compare notes (I have noted 4 breaches of contract) - very happy to discuss and exchange thoughts and actions.   

DullGreyGuy

ResearchGuru said:

I am in a similar situation, having been part of (as people above) the now closed portfolio of Income Protection Insurance.  I took out my IPI in November 2010.  The product became 'closed to new retail customers' in 2012 and was 'sold off' to Monument Insurance DAC in 2017.  Both publicly (Irish Times and on their own website) Monument Insurance stated that they would continue to honour this closed portfolio product.   The T&Cs only state  their right to cancel individual policies, no where does it state that they have a right to withdraw this product in its entirety.  Also, within their T&Cs, p.19, Section 7c, they state that they will give 60 days notice of any changes.  Yet they notified me (letter dated 9th May, received via post on 11th May) that they are withdrawing it on 30th June.  This is not 60 days (another breach of contract).  I have of course, complained direct to Monument insurance (digital trail) via email (an email address hard to get, most likely deliberately) and also escalated this matter to the Financial Conduct Authority (FCA) who have investigated my complaint and lodged an official case number.   If others impacted (similar to myself) wish to compare notes (I have noted 4 breaches of contract) - very happy to discuss and exchange thoughts and actions.   

If they can cancel individual policies then by default they can close the portfolio by exercising that right on every policy. Its a case therefore of not stating the obvious rather than a breach of contract. 

Have you looked in your policybook for cancellation terms? A cancellation typically isnt considered a "change" and therefore will normally have different terms on notice periods etc. 

Is yours an annual policy? Most PPI/ASU policies were but some are a monthly policy with an annual review. In some cases this isnt a case of "cancelling" but a case of not renewing.

You are probably mistaking the FCA and FOS, the later deals with customer complaints on behalf of the FCA. They wont do anything material until you have recieved the final response from the insurer, and what they sometimes do before hand causes more harm than good. 

Assuming it is a 60 day cancellation term it appears they are a couple of days short of that... not sure what material difference an extra 7 days notice will be making to you?

dunstonh

The T&Cs only state  their right to cancel individual policies, no where does it state that they have a right to withdraw this product in its entirety. 

And does it say they have to continue it in perpetuation?

and also escalated this matter to the Financial Conduct Authority (FCA) who have investigated my complaint and lodged an official case number. 

The FCA do not handle consumer complaints.    And if they had "investigated" you would have a response as "investigated" means looked into and responded.  They open a case number with all communications.
Have you got your Fs mixed up?   FOS instead of FCA maybe?

 If others impacted (similar to myself) wish to compare notes (I have noted 4 breaches of contract) - very happy to discuss and exchange thoughts and actions.   

You haven't identified any significant breach of contract.

  The T&Cs only state  their right to cancel individual policies, no where does it state that they have a right to withdraw this product in its entirety.  

Withdrawing the product will result in individual policies being cancelled.   It is the same thing.

Also, within their T&Cs, p.19, Section 7c, they state that they will give 60 days notice of any changes.  Yet they notified me (letter dated 9th May, received via post on 11th May) that they are withdrawing it on 30th June.  This is not 60 days (another breach of contract). 

Even if you win on this point, you get an extra few days cover.  It doesn't change anything beyond that.  

  I have of course, complained direct to Monument insurance (digital trail) via email (an email address hard to get, most likely deliberately)

Every regulated firm has its complaint address published and must verify that to the regulator at least annually.

ResearchGuru

Interesting how you state that 'It's just a case of not stating the obvious'.   Contracts are lengthy and carefully worded, deliberately so, to cover all forseeable circumstances.  It is a weak defense to state 'it should be obvious'.  It's rather like stating that e.g. in court, a defendant is obviously guilty (without giving specific evidence) and expect that to be accepted.  No.  If it isn't in the contract, then it isn't obvious (it wasn't to me) so that can go under mis-selling or contract breach (as it wasn't listed in the contract).   Also, you avoided the text entirely where I mentioned that they publicly stated (published in the Irish Times and even on their own web site (I have page screen shots) when they purchased the closed portfolio that they 'would honour the existing policies').   They can't state one thing (a message received far and wide to all, including their 'customers' then do another thing).  Mis-sold, misrpresented or a breach.  Take your pick.  One thing you are correct on though, yes, it is the Financial Ombudsman Service (FOS) not the FCA and they have opened the case.  You can ascertain the closeness of dates, so the case is just recently opened.  I have submitted screen shots of the T&Cs, public announcements, letters received as  well as Annual reports that show that these 'high risk products' would have risks mitigated (and processes declared) and so on. 

dunstonh

If it isn't in the contract, then it isn't obvious (it wasn't to me) so that can go under mis-selling or contract breach (as it wasn't listed in the contract).  

Why would it go under misselling?

  Also, you avoided the text entirely where I mentioned that they publicly stated (published in the Irish Times and even on their own web site (I have page screen shots) when they purchased the closed portfolio that they 'would honour the existing policies').  

And they did.   However, nothing is guaranteed to be perpetual. 

 One thing you are correct on though, yes, it is the Financial Ombudsman Service (FOS) not the FCA and they have opened the case. 

So, they haven't investigated then like you said?
What was the complaint response from the insurer as you cannot go to the FOS until after the complaint response from the insurer has been received or 8 weeks have passed?  If you have gone directly to the FOS, they will just forward their interpretation of your complaint to the insurer to resolve.  They will not look at it before then.

 I have submitted screen shots of the T&Cs, public announcements, letters received as  well as Annual reports that show that these 'high risk products' would have risks mitigated (and processes declared) and so on. 

In most cases, it is the reassurer that has pulled out and not the insurer or the book has got too small to continue (or both).  It is a very hard market and if the insurer cannot find a new reassurer, then they are left with little choice.   The insurer may have had the intention to continue the plans but circumstances change.

 They can't state one thing (a message received far and wide to all, including their 'customers' then do another thing). 

Yes they can.

DullGreyGuy

ResearchGuru said:

Interesting how you state that 'It's just a case of not stating the obvious'.   Contracts are lengthy and carefully worded, deliberately so, to cover all forseeable circumstances.  It is a weak defense to state 'it should be obvious'.  It's rather like stating that e.g. in court, a defendant is obviously guilty (without giving specific evidence) and expect that to be accepted.  No.  If it isn't in the contract, then it isn't obvious (it wasn't to me) so that can go under mis-selling or contract breach (as it wasn't listed in the contract).   Also, you avoided the text entirely where I mentioned that they publicly stated (published in the Irish Times and even on their own web site (I have page screen shots) when they purchased the closed portfolio that they 'would honour the existing policies').   They can't state one thing (a message received far and wide to all, including their 'customers' then do another thing).  Mis-sold, misrpresented or a breach.  Take your pick.  One thing you are correct on though, yes, it is the Financial Ombudsman Service (FOS) not the FCA and they have opened the case.  You can ascertain the closeness of dates, so the case is just recently opened.  I have submitted screen shots of the T&Cs, public announcements, letters received as  well as Annual reports that show that these 'high risk products' would have risks mitigated (and processes declared) and so on. 

No, saying I can cancel something at my sole discretion is the same as saying I can cancel everyone with the same terms at my sole discretion. There is no difference to you if they cancel just your policies, yours and 50% of others or all policies. Other people's contracts are nothing to do with yours and so cancelling a portfolio would not only be stating the obvious but irrelevant to put in your contract.

The only time where this may not be the case is if they were to state they have no cancellation rights unless they are withdrawing the whole portfolio; the reserve isnt necessary

Your contract of sale for a knife didn't include terms that you couldn't use it to kill someone but you'd have a hard time trying to hold the seller liable for not telling you this. Somethings are just so obvious they dont need stating.

How can it be missold? You state you bought it several years before the statement! Love to see how you claim you only bought it because of a statement that was going to be made 7 years in the future!! Similarly statements made 7 years after a policy is sold doesn't change the terms & conditions of the policy for it to be a breach of contract. 

Mislead potentially has some grounds, particularly if there was a Part VII transfer and it was categorically stated there however I suspect to the courts the statement would have been tempered rather than promising it will still be running in 3030. The reality is that the world changes and businesses have to respond. Since 2017 we've had a global pandemic and many ASU/PPI providers withdrew their products already and so you are somewhat lucky they continued until now.