Case study exclusion should have been listed in policy document Driver’s An insurer who told a consumer, Mr G, during a phone conduct their sales process in a fair and transparent call that he would not be covered for comprehensive manner. motor vehicle insurance because of his driving history, The committee found that the phone conversation with breached the General Insurance Code of Practice by the staff member resulted in an unfair sales insurer’s not listing him as an excluded driver in the policy process. Mr and Mrs G would have proceeded on the documentation. basis that because they were listed as co-insured on Mr G rang the insurer to arrange comprehensive motor the policy documentation, Mr G was covered when vehicle insurance for his car, which he and Mrs G driving the car. would be driving. The committee said it was unfair to expect a consumer The insurer advised him during the telephone call that who had bought an insurance product to remember he would not be covered and then issued policy what was discussed over the phone, possibly months documentation for the insurance to Mr and Mrs G as previously, particularly when the consumer was co-insured (policyholders). The documentation did not excluded from cover, and not reflected in the policy list Mr G as an excluded driver. documentation. To avoid confusion, the insurer should have endorsed the policy documentation by listing Mr Seven months later, Mr G lodged a claim for damage G as an excluded driver. caused to the car while driving it. The insurer denied the claim on the basis that Mr G was excluded from The committee is discussing with the insurer how to cover (as advised during the phone call). The insurer prevent this happening again. said it was entitled to rely on the verbal notification made to Mr G that he would not be covered as a driver. The General Insurance Code Governance Committee found that the insurer had breached subsection 4.4 of the code. This subsection requires code subscribers to
Case study Driver’s exclusion should have been listed in policy document An insurer who told a consumer, Mr G, during a phone call that he would not be covered for comprehensive motor vehicle insurance because of his driving history, breached the General Insurance Code of Practice by not listing him as an excluded driver in the policy documentation. Mr G rang the insurer to arrange comprehensive motor vehicle insurance for his car, which he and Mrs G would be driving. The insurer advised him during the telephone call that he would not be covered and then issued policy documentation for the insurance to Mr and Mrs G as co-insured (policyholders). The documentation did not list Mr G as an excluded driver. Seven months later, Mr G lodged a claim for damage caused to the car while driving it. The insurer denied the claim on the basis that Mr G was excluded from cover (as advised during the phone call). The insurer said it was entitled to rely on the verbal notification made to Mr G that he would not be covered as a driver. The General Insurance Code Governance Committee found that the insurer had breached subsection 4.4 of the code. This subsection requires code subscribers to conduct their sales process in a fair and transparent manner. The committee found that the phone conversation with the insurer’s staff member resulted in an unfair sales process. Mr and Mrs G would have proceeded on the basis that because they were listed as co-insured on the policy documentation, Mr G was covered when driving the car. The committee said it was unfair to expect a consumer who had bought an insurance product to remember what was discussed over the phone, possibly months previously, particularly when the consumer was excluded from cover, and not reflected in the policy documentation. To avoid confusion, the insurer should have endorsed the policy documentation by listing Mr G as an excluded driver. The committee is discussing with the insurer how to prevent this happening again.
fos-annual-review-201718-word.docx