Double Cover Complaint Dismissed

A complaint against an advisory firm by a man who found he had been paying for two life insurance policies has been dismissed by Financial Complaints Ombudsman Service Limited (FSCL).

The complainent, ‘Robert’, first took out life cover in 2006. However, in 2012 he met with a new adviser who suggested he move to a new insurer. 

Over the subsequent years, Robert paid two sets of life premiums and was sent annual confirmation of cover by both insurers. Despite this, Robert told FSCL he didn’t notice he had two policies and had paid $17,000 in premiums for the first policy that he said should have been cancelled.

In 2018, a new advisory firm bought the client book of Robert’s 2012 adviser and the double insurance error was identified in March 2022.

Robert asked the company to compensate him for his loss saying the adviser was negligent for not cancelling the original cover, and considered the new 2018 advisers should compensate him.

The new firm told FSCL they did not know Robert was paying for two policies and so did not have the opportunity to correct the error.

The adviser from 2012 had shortcomings in their service…

They also said FSCL could not investigate Robert’s complaint because it cannot consider a complaint where more than six years have passed from the date the consumer should have reasonably become aware of the issue.

In a published statement, FSCL says when a client replaces one policy with another the adviser should ensure the original policy is cancelled.

“The adviser from 2012 had shortcomings in their service in this regard,” it said.

“However, by not noticing the fortnightly premium payments and the confirmation of cover letters from the first insurer, Robert had contributed considerably to the ongoing issue.”

FSCL decided it was unable to investigate the complaint.

“Advisers should be careful to ensure that a client’s previous policies are successfully cancelled upon taking out new policies,” says FSCL.