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Christine used an insurance adviser to change insurers.

In June 2014, Christine asked her adviser to review her life and disablement policy as she felt she was paying too much in premium. Christine said that life and income protection were the key policies to be looked at.

A month later, the adviser sent Christine an insurers’ report containing a brief review of a number of insurers’ policies. The adviser recommended that Company X was the preferred provider.

The adviser later sent a further email which contained a revised report giving quotes for both life and income protection, and a recommendation to go with Company Y.

The adviser later found out that Christine’s existing life cover had been cancelled. The policy had lapsed because Christine had not paid the premium for her policy.


Placing cover

In October 2014, the adviser confirmed that Christine’s new life cover had been signed off by Company Y though she was still awaiting word about other the income protection cover. The confirmation also stated “you are not covered by this insurance yet, and should not cancel any existing insurance.”

The insurer subsequently notified that it would not provide Christine with trauma or income protection cover. This was because of Christine’s extensive list of pre-existing medical conditions including lupus, a previous bone cyst, back issues, a mole with irregular lesions and nervous system issues that could not be explained.

Later in October Jane and Christine met in order to sign off the cover.

Two years later the adviser contacted Christine to suggest a ‘catch up’ prior to Christmas. Christine did not respond.



In May 2017 Christine was diagnosed with Ductal Carcinoma In Situ (DCIS). Christine contacted her adviser to see whether she had any trauma cover. The adviser confirmed that no trauma cover was in place.

Christine was unhappy because she said she had disablement cover with her previous insurer but did not have it with Company Y.

Christine claimed that she would be at an immediate and future disadvantage because DCIS would be an exclusion going forward. Christine thought that the adviser had breached her professional responsibilities and complained to FSCL.


Christine’s view

Christine said that the adviser had failed to place insurance as instructed. Because she did not have income protection or trauma insurance in place, Christine was not entitled to any form of pay-out which may have been available after being diagnosed with DCIS.

Christine believed that the adviser was obliged to arrange trauma cover as well as life cover. She reasoned that the adviser should be liable for the amount that would have been payable if the adviser had placed the cover as per Christine’s instructions and thought the adviser should have told her to reinsure with her current insurer while she worked through the options.

Christine said the adviser had failed her further by:

  • not issuing a statement of advice (SOA) immediately at the time of consultation but, rather, three months later and
  • not conducting annual reviews since the policy was in place.

Christine believed that if an annual review had occurred, trauma and income protection cover that had been deferred could have been reapplied for or other providers could have been approached. 

Christine thought she had better cover with her former insurer and alleged that the adviser had only moved her for the adviser’s own financial benefit.  


The adviser’s view

Although the adviser had sent the SOA a number of months after cover was placed, the adviser was confident that she had discussed all the possibilities with Christine. The adviser believed that she had done everything she could to get Christine the best cover available. Christine could not obtain trauma and income protection insurance because of her extensive medical history.

When Christine’s income protection cover was declined, the adviser had pushed hard to try and secure trauma as a second option. However, this was also declined due to Christine’s medical history.  An independent consultant confirmed that, for Christine to gain income protection and trauma cover, there would need to be a significant change to her health-risk factors.

The adviser said that Christine now had superior life with Company Y compared to her previous insurer. The cover had no exclusions and Christine was insured for a larger amount.

The adviser said Christine would have been well aware that life cover was the best cover which fitted within her budget. The reason Christine’s cover was moved to another insurer was because Christine would receive twice the entitlement with fewer exclusions.



Under s33 of the Financial Advisers Act 2008 an adviser must exercise the care, diligence and skill that a reasonable financial adviser would exercise in the same circumstances. Although some of the adviser’s practices may have been casual, particularly the delay in sending her SOA to Christine, we found that the adviser had reasonably complied with her duties.

An independent industry expert agreed that income protection cover would not have been available for a woman of Christine’s age (40+) with so many pre-existing conditions.

The expert believed there were far too many conditions that an insurer would want to exclude. Once an insurer excludes three or more conditions, invariably it will not offer terms. This explained why the adviser had stopped attempting to seek cover (after reasonable attempts were made at a number of different insurers.)

Although the adviser had told Christine aware that she would try and get trauma cover in lieu of income protection, she did not tell Christine with certainty that she could attain it.


Responsibility for policy lapsing

The adviser was not responsible for the fact that Christine let her policy with her previous insurer lapse. Christine had let the policy lapse through non-payment.


Statement of advice (SOA)

Although the SOA should have been issued earlier, the failure to provide a timely SOA had not caused Christine any loss. In the third insurers’ report, the adviser had stated that Company Y was the preferred insurer, offering cover of over $1 million. At this point in time, Christine must have been aware that cover was for life only.


Insurance review

The adviser contacted Christine in November 2016 to ask whether she wanted to catch up for a review, but was told that Christine was too busy. Christine said that she was happy with the cover in place.

The advisers we consulted said that people very rarely take up the offer of an annual review and an adviser could not be expected to relentlessly chase up annual reviews.

In this case, the adviser had made reasonable efforts to offer the review.


Contribution to loss?

Even if an annual review had occurred, it would not have changed Christine’s situation. She would not have attained income protection or trauma cover unless there was a material change in her health.



Although it would have been very stressful for Christine not to have any relevant cover when she was diagnosed with DCIS, the adviser could not have obtained cover for Christine and therefore was not the cause of Christine’s ‘loss’ nor her stress and inconvenience.

We did not uphold the complaint.