Family Assurance Friendly Society Limited · DRN-6144400

The complaint Mr B’s complained that Family Assurance Friendly Society Limited “(FAFS”) unfairly declined the claim he made after he was diagnosed with a terminal condition. And they cancelled his policy because they said he’d not accurately disclosed medical information in his application. What happened Mr B bought a life insurance policy from FAFS in spring 2024. The policy allowed a claim to be made if the policyholder dies, or is diagnosed with a terminal condition which met the policy definition. Just a couple of weeks after the policy started, Mr B was very sadly diagnosed with a rare form of cancer. By summer 2025, this had progressed to be terminal. So he made a claim on the policy. FAFS obtained and reviewed medical information to help them assess the claim. Having done that, they declined it, because they said Mr B hadn’t provided them with accurate answers to questions about his health in his application. They said that, if he had, they wouldn’t have offered him cover without reviewing his medical records. And they wouldn’t have covered him after his diagnosis. FAFS said this meant they could also cancel Mr B’s policy. They refunded him the premiums he’d paid. Mr B complained about FAFS’s decision, but FAFS didn’t change it. So Mr B brought his complaint to the Financial Ombudsman Service. Our investigator reviewed the information provided by both parties and concluded FAFS didn’t need to do any more to resolve Mr B’s complaint. She was satisfied they’d dealt with the misrepresentation in line with the relevant law. And while she noted they hadn’t told Mr B how they’d categorised his misrepresentation, they’d dealt with it as careless – which she said was fair. Mr B didn’t agree with the investigator’s view. So I’ve been asked to make a decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done that, I’m not upholding Mr B’s complaint. I’m sorry to deliver such unwelcome news at what I know is an incredibly difficult time for him and his family. I hope it will help if I explain the reasons for my decision. I’ll do so, focusing on the points and evidence I consider material to my decision. So, if I don’t mention something in particular, it’s not because I haven’t thought about it. Rather, it doesn’t change the outcome of the complaint. My role here isn’t to decide the claim. It’s to decide whether the decision FAFS made to decline it was made fairly and reasonably, in line with the relevant law. The relevant law in this case is the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). This requires consumers to take reasonable care not to make a

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misrepresentation when taking out a consumer insurance contract (a policy). The standard of care is that of a reasonable consumer. And if a consumer fails to do this, the insurer has certain remedies - provided the misrepresentation is what CIDRA describes as a “qualifying misrepresentation”. For it to be a qualifying misrepresentation the insurer has to show it would have offered the policy on different terms or not at all if the consumer hadn’t made the misrepresentation. CIDRA sets out a number of considerations for deciding whether the consumer failed to take reasonable care. And the remedy available to the insurer under CIDRA depends on whether the qualifying misrepresentation was deliberate or reckless, or careless. In this case, Mr B answered “no” to the following questions: • “In the last 2 years have you been under review or follow up or had any test or investigation for any other condition or symptom? • In the last 2 years have you been advised to see a specialist or to have any tests, scans, investigations or counselling for any condition or symptom?” Having reviewed his medical records, FAFS say Mr B should have answered “yes”. I’ve studied the medical records FAFS relied on to make their decision to decline the claim. They show that, between late 2022 and Mr B’s application, he consulted his GP on a number of occasions in relation to back and abdominal pain. He was referred for a variety of tests. On one occasion, he went to Accident & Emergency due to the severity of the pain. I appreciate the cause of Mr B’s pain was never identified before he bought the policy. But that wasn’t what the questions asked – they asked about tests and other investigations and referrals to specialists. Mr B had all of these in the two year period before he bought the policy. So I think it’s fair for FAFS to say he should have disclosed them. And, by not doing so, he made a misrepresentation. And I think that misrepresentation is a qualifying one within the meaning of CIDRA. While Mr B has said he doubts that disclosing his medical history would have led to FAFS not covering him. But FAFS have provided our service with their confidential underwriting guidance. That shows full disclosure would have meant they wouldn’t have offered him a policy. Finally, I’ve considered the remedy FAFS have applied. Mr B’s position was that, if he did make a misrepresentation, it was innocent or – at worst – careless. If it were innocent, then the misrepresentation wouldn’t be a qualifying one within the meaning of CIDRA and the claim should be paid. It’s clear Mr B bases this submission on studying the ABI Code of Practice “Managing Claims Involving Misrepresentation For Individual and Group Life, Critical Illness and Income Protection Insurance Products”. I’ve reviewed this. While I appreciate the effort Mr B has made, I can’t agree that his misrepresentation was innocent. The code sets out an explanation of each category of misrepresentation. The relevant explanation for innocent misrepresentation includes the following: “…a reasonable person would have considered the information was not relevant to the insurer.” I don’t think a reasonable person would consider that more than a year’s worth of GP consultations, tests, investigations and referrals for unexplained pain wouldn’t be relevant to

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the insurer. I think they would more likely say they were key to facilitating the insurer to decide the risk Mr B presented and whether they were prepared to accept that risk. FAFS didn’t tell Mr B how they categorised his misrepresentation. But they’ve applied the remedy they should use where a misrepresentation is careless. The ABI Code of Practice says a careless misrepresentation: “…includes anything from an understandable oversight, or an inadvertent mistake, to serious negligence”. I think it’s reasonable to say Mr B’s misrepresentation fell into this category. CIDRA provides that, where an insurer wouldn’t have offered a consumer a policy on any terms, they may void the policy and decline all claims. But they must return the premiums the customer has paid. FAFS have evidenced they wouldn’t have provided Mr B with a policy. And they refunded his premiums. So they’ve dealt with Mr B as CIDRA requires them to do. I can’t say that’s unfair. I’m very aware of the difficult financial situation Mr B’s condition has put him and his family in. I’m sorry my decision won’t change that. But, for the reasons I’ve explained, I don’t think FAFS need to do anything else to resolve his complaint. My final decision For the reasons I’ve explained, I’m not upholding Mr B’s complaint about Family Assurance Friendly Society Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 27 March 2026. Helen Stacey Ombudsman

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