Windsor-based Assurant Solutions UK has admitted it made “fundamental errors” in dealing with a legitimate claim against an income protection policy.
After telling the claimant for six months she was entitled to nothing, a pay-out was finally made once adviser Bob Cook, founder of Best Income Protection, pursued the company.
Mr Cook, who sold the client the policy in June 2008, pursued the company for three months until Assurant finally issued an apology and payment in March.
Resurrecting the spectre of past criticisms of the protection market that advisers have spent years trying to erase, policyholder Shas Iqbal said the stress and sleepless nights she has suffered have “totally destroyed” her faith in the insurance industry.
Certain his client is far from alone in having her claim wrongly declined in light of his dealings with Assurant, Mr Cook has referred the company to the Financial Conduct Authority (FCA) to investigate.
“IFAs will have clients in the same situation,” he said. “The client walks away thinking they have been conned and sold a bad policy. The way the claim was handled, the complete lack of knowledge of everybody in the department [at Assurant] led me to think it is not an isolated incident.”
His client, Mrs Iqbal, purchased the income protection to cover 75 per cent of her monthly income, less any sick pay, if she was unable to work through illness.
As her normal gross monthly income was £2,400, the expected policy benefit was £1,800 minus the employer sick pay of £1,000, meaning she was entitled to £800.
But Mr Cook said Assurant, part of the Assurant Group that dates back to 1941, instead deducted the employer’s sick pay from the benefit purchased and claimed his client was entitled to nothing.
In a letter to Mr Cook dated 31 March 2016, Assurant admitted it had inflicted “delays, misinformation and inconvenience” on Mrs Iqbal.
“We made fundamental errors on this claim in our decision-making and as a consequence the information relayed to both of you (on a number of occasions) was clearly incorrect,” the letter said.
Assurant agreed to pay her £800 compensation on top of the monthly benefit of £802.45 it had recalculated.
A spokesperson for Assurant declined to comment on the specific case and the fact the complaint had been made about its conduct to the FCA.