Income Protection Policy Taken over by a new Company now they won't pay!

ReflectionsinaFIAT

Hi, I've had an Income Protection Policy for approx 20 years, It pays out £500 a month for up to 12 months.
I have used it a couple of times over the years, the last time being April 2023 for 4 months. They paid out
with no problems the form never asked what the money was for like a mortgage(I have no mortgage since 5 years ago)

In May 2024 a new company took over my Policy. I needed to make another claim recently so asked for a claim form.
I noticed it was a different form from last time but filled it in anyway, there was a new section which asked if the
claim was for a mortgage payment so I ticked NO.

LO and behold they have turned my claim down! They claim that because I don't have a mortgage anymore
I'm not allowed to claim on this policy. They have offered to refund my premiums from when they took over my
Policy(approx £200) Can they do this? I now will be unable to get cover elsewhere as I'm currently off sick.

I have emailed them rejecting their offer and demanding an explaination.
So far no response. Who can I complain too, the Ombudsman or FCA?

Thanks for reading.

DullGreyGuy

ReflectionsinaFIAT said:

Hi, I've had an Income Protection Policy for approx 20 years, It pays out £500 a month for up to 12 months.
I have used it a couple of times over the years, the last time being April 2023 for 4 months. They paid out
with no problems the form never asked what the money was for like a mortgage(I have no mortgage since 5 years ago)

In May 2024 a new company took over my Policy. I needed to make another claim recently so asked for a claim form.
I noticed it was a different form from last time but filled it in anyway, there was a new section which asked if the
claim was for a mortgage payment so I ticked NO.

LO and behold they have turned my claim down! They claim that because I don't have a mortgage anymore
I'm not allowed to claim on this policy. They have offered to refund my premiums from when they took over my
Policy(approx £200) Can they do this? I now will be unable to get cover elsewhere as I'm currently off sick.

I have emailed them rejecting their offer and demanding an explaination.
So far no response. Who can I complain too, the Ombudsman or FCA?

Thanks for reading.

So... you say it pays for 12 months which means it's likely to be an ASU policy which is a form of general insurance and an annual policy which renews each year -v- PHI which is a protection policy that lasts up until your birthday of a redefined age (normally 65 or whenever you are hoping of retiring)

For one insurance company to take over an in force policy from another it requires an 18-24 month legal process and the approval from the High Court and it costs vast sums in fees and lawyers etc. On the basis you say it keeps happening then its not that someone is taking over them but either you are with an intermediary who keeps switching which provider they use or companies are not wanting to offer renewals and so instead are selling marketing rights so someone else tries to flog you next years policy. As each year is a distinct policy the terms can change materially.


You need to dig out your paperwork, I am guessing you arent using an intermediary (knowingly anyway) and so these are definitely non-advised sales which means its your job to make sure the policy is right for your needs rather than for them to do so. 

Ultimately put a complaint in that you had ASU/PPI not MPPI and therefore the renewal wasnt appropriate unless their covering letter and or its inserts called out the details in enough detail  in which case it will come down to if the FOS would likely side with you for them not giving enough detail or side with them for you not having read things properly as they told you to. 

Hoenir

ReflectionsinaFIAT said:

Hi, I've had an Income Protection Policy for approx 20 years, It pays out £500 a month for up to 12 months.

Or was it a mortgage protection policy ? Suggest you dig out the policy and check. 

ReflectionsinaFIAT

I'll find the paperwork, but it was with a Company called Pinnacle when I took it out.
It was Income Protection with a fixed payout of £500 a month for 12 months(My Mortgage was more at the time).
It then became Cardif Pinnacle after about 10 years. I never used an intermeadiate I arranged it myself.

I paid off Mortgage in 2021.

I last made a claim in April 2023 and got £500 for 4 months no problem.
Mortgage was never mentioned on the form.

A Company called Wessex took over in late 2024, I asked for a claim form recently and it was a totally 
different form with a checkbox for Mortgage Yes / No which was not there on the previous form.

Hope this helps.

DullGreyGuy

ReflectionsinaFIAT said:

I'll find the paperwork, but it was with a Company called Pinnacle when I took it out.
It was Income Protection with a fixed payout of £500 a month for 12 months(My Mortgage was more at the time).
It then became Cardif Pinnacle after about 10 years. I never used an intermeadiate I arranged it myself.

I paid off Mortgage in 2021.

I last made a claim in April 2023 and got £500 for 4 months no problem.
Mortgage was never mentioned on the form.

A Company called Wessex took over in late 2024, I asked for a claim form recently and it was a totally 
different form with a checkbox for Mortgage Yes / No which was not there on the previous form.

Hope this helps.

Dont know much about the history of Cadif Pinnacle, part of BNP Paribas group, but whilst branding and ultimate ownership may have changed over the years it was actually the same company through the time.

Cardif however sold their non-Pet book of business to EIFlow Insurance in Gibraltar in 2023, this was structured in two ways, for their "creditor" book (which is where your policy falls under) it was just the case that EIFlow would issue renewals as there is very little tail liability. For the other non-Pet book of business they went through the extensive legal process (Part VII of FSMA) to transfer all the historic liabilities as well as any renewals to the same, this was sanctioned by the High Court on 9 December 2024 and came into effect on 31 December.

EIFlow is a company that specialises in buying old books of business that the original insurers no longer want and dealing with the run off. Whilst your policy wasnt Part VIIed you the whole deal is discussed at great length in the Independent Expert report that was sent to those who's policies were being transferred https://www.cardifpinnacle.com/pdf/transfer/2_The_Independent_Expert_Report.pdf - these things are extraordinarily open about the commercial arrangements 

For completeness Wessex Group is just an outsourcing organisation who'll be running the operational side of the business for EIFlow. Backbook buyers typically are all about extracting value, in most cases there is no future income though your part of the deal is slightly different. They simply get a pot of money to take on the liability and have to ensure they can settle the liability for less than the pot of money plus investment return.

Long story short, Pinnacle didnt want you any more but instead of simply not renewing your policy they instead sold your details to an offshore insurer who at some point in 2024 offered to sell you a policy and you accepted. 

You need to dig out your renewal from last year, it'll be important to see what the letter/email said and if it contained a new policy book. As a renewal they were free to keep the same terms or change them. The renewal letter should have explained. 

ReflectionsinaFIAT

I've found the original paperwork from when it was Cardif Pinnacle. The Policy is and has always been titled
'Personal Protection Insurance' until Wessex took over and subtly renamed it 'Mortgage Protection Policy'
The Policy was taken out to pay out £500 a month, not to pay a Mortgage Payment which was higher.
I last claimed in 2023 and received £500 for several months under my old Policy. I had no Mortgage and they 
have never asked for proof of a Mortgage. 
The new Insurer has their own Claim Form, which asks if you have a Mortgage, the old form didn't.
There was no New Policy booklet issued, just a leaflet explaining that a couple of changes were being made,
none of which were related to renaming or changing what was covered. A new Policy number was issued.
I was assured by both the old insurer and the new one that there would be no change to my current Policy
and it would carry on, just be under a different Company.

I think I have a case for mis-selling, they have fundimentaly changed the nature of my Policy which I have paid into 
for over 25 years and failed to inform me of the change made, whilst re-assuring me that no changes were being made.

DullGreyGuy

ReflectionsinaFIAT said:

There was no New Policy booklet issued, just a leaflet explaining that a couple of changes were being made,
none of which were related to renaming or changing what was covered. A new Policy number was issued.
I was assured by both the old insurer and the new one that there would be no change to my current Policy
and it would carry on, just be under a different Company.

I think I have a case for mis-selling, they have fundimentaly changed the nature of my Policy which I have paid into 
for over 25 years and failed to inform me of the change made, whilst re-assuring me that no changes were being made.

I dont like the term mis-selling, and in a non-advised sale it's a touchy subject. 

I would register a complaint with them on the basis they gave you incorrect information about the changes since the last policy years and in relation to a new company offering the renewal. On the basis of that incorrect information you agreed to the renewal and hence you find yourself with an unsuitable product.

ReflectionsinaFIAT

Thanks for the reply, I'll do that.

ReflectionsinaFIAT

Well I had them on the phone today and they are not budging. They have repeated the offer of refunding my Premiums paid to date.
I have rejected this and offered to send them proof that the original Policy was not Mortgage dependent.
Is it worth getting the Ombudsman / FCA involved at this stage?

dunstonh

Is it worth getting the Ombudsman / FCA involved at this stage?

You cannot get the FCA involved.  That is not their role.

You cannot involve the FOS until you have made a complaint and had the response to that complaint.   Have you raised a complaint and had the final response letter?   

Hoenir

ReflectionsinaFIAT said:

I think I have a case for mis-selling, they have fundimentaly changed the nature of my Policy which I have paid into 
for over 25 years and failed to inform me of the change made, whilst re-assuring me that no changes were being made.

Your old policy no longer exists. A Company cannot offer a product it doesn't have. You've been offered a refund of premiums so have suffered no financial loss.