Policy cancellation dispute
Mr Spicer made a complaint because his policy had not been cancelled when he asked for it to be.
Mr Spicer made a complaint because his policy had not been cancelled when he asked for it to be.
Mr and Mrs Spicer* arranged health insurance policies through an adviser, which included specialist and test cover (the S&T policy).
In September 2021, Mr Spicer asked the adviser to cancel the S&T policy during a phone conversation. Following this, the adviser’s administration team emailed Mr Spicer a cancellation form and sent him a text, asking him to check his spam folder if the email did not arrive.
One week later, the administration team sent another text and email to Mr Spicer, saying it had not received a response from him and to “get in touch when [he was] ready to proceed”. Mr Spicer did not do so, and the policies continued.
In June 2022, Mr Spicer emailed the adviser to ask whether he had cover for a skin specialist. He then made an online claim under the S&T policy, which the insurer paid.
In July 2022, the insurer sent Mr Spicer an anniversary letter for the policies, including the S&T policy.
In April 2023, Mr Spicer realised that the S&T policy had not been cancelled and asked for the $2,500 in premiums he’d paid after September 2021 to be refunded. The adviser offered an ex gratia payment of $500, which Mr Spicer rejected.
Mr Spicer complained to the IFSO Scheme, saying he’d expected the policy to be cancelled when he’d asked his adviser to cancel it.
While it might have been better customer service for the adviser to have phoned Mr Spicer when he didn’t respond to the emails, the IFSO Scheme disagreed that the adviser was solely responsible for ensuring the policy had been cancelled. The adviser also could not have cancelled the policy without Mr and Mrs Spicer’s signatures consenting to the cancellation.
The IFSO Scheme believed Mr Spicer should have been aware that the policy hadn’t been cancelled, because he had received his policy anniversary letter, and had continued paying his premiums.
Further, there was no loss, because the premiums paid were considered used, as Mr Spicer had made a claim and could have made other claims during the period, if needed.
The IFSO Scheme did not believe the adviser should be required to refund the premiums to Mr Spicer, or to reinstate the goodwill offer, which the adviser confirmed had expired.
Complaint not upheld
*Names have been changed
When a consumer cancels an insurance policy, they should follow up to make sure it has been actioned. An adviser cannot cancel a policy without the policy holder’s signature consenting to the cancellation.