Liverpool Victoria Financial Services Limited · DRN-6225732

The complaint Mr D’s complained that Liverpool Victoria Financial Services Limited (“LV”) didn’t pay the full value of his critical illness cover when he made a claim following a heart attack. What happened In 2015, Mr D bought life and critical illness cover through a broker. This was reviewed in November 2022 through the same broker and Mr D was advised to buy to a new policy which gave him £75,000 cover. In summer 2025, Mr D sadly suffered a heart attack. So he submitted a claim to LV. LV obtained Mr D’s medical records to help them assess the claim. They noted from these that Mr D had attended hospital in June 2022 with chest pain and a racing heart – which he’d not disclosed in his 2022 application. LV said that, if they’d known about this episode, they’d have charged Mr D a higher premium for his policy. So they settled his claim proportionately for £44,452.50. Mr D complained to LV about their decision - which he said was unfair, because he’d had continuous cover with them since 2015. In their reply, LV explained that, because he’d not answered the application questions accurately, they’d only charged him 59.27% of the premium they should have done. So they only had to pay him 59.27% of the sum assured. And they said that, when he’d taken out the new policy in 2022, the 2015 policy had been cancelled. Mr D wasn’t satisfied LV’s response resolved his complaint and brought it to the Financial Ombudsman Service. Our investigator reviewed the information provided by both parties and concluded LV didn’t need to do anything different. He was satisfied LV had written to Mr D confirming that, as he’d cancelled the direct debit, the 2015 lapse. So it was fair to say the 2022 policy had replaced it. The investigator was also satisfied that it was fair for LV to say his hospital attendance in June 2022 should have been disclosed in the 2022 application. And that they’d dealt with Mr D’s misrepresentation in line with the Consumer Information (Disclosure and Representations) Act 2012 (“CIDRA”). Mr D didn’t agree with our investigator’s view. So I’ve been asked to make a final 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 D’s complaint. I know he’ll be disappointed by my decision and I’m sorry about that. I hope it will help if I explain why I’ve made it.

-- 1 of 3 --

It’s not my role to decide whether Mr D’s claim should be settled in full. Rather, I have to decide whether LV’s decision to settle it proportionately was fair, reasonable and in line with the relevant law. The relevant law in this case is CIDRA. This requires consumers to take reasonable care not to make a 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 D answered “no” to the question: “Have you ever had any of these? Options – … Heart attack, irregular heartbeat, cardiomyopathy, valve disorder or any other heart condition or heart surgery… “ And in relation to the question: “In the last 5 years have you had any of these? Options – Raised blood pressure, cholesterol or chest pain….” Mr D disclosed only raised cholesterol. LV say the notes of his hospital attendance in June 2022 show he should have disclosed an irregular heartbeat and chest pain. Mr D says he didn’t because the issue was a one-off event which wasn’t a heart attack and didn’t result in any treatment. I’ve thought very carefully about this, but I’m not persuaded by Mr D’s argument. The questions on the application aren’t limited to asking about specific diagnosed conditions. They also ask about symptoms of the type he had when he went to hospital in summer 2022. The discharge letter from that attendance records Mr D’s “presenting complaint” as “chest pain”. And the summary for his GP states he had sudden heart racing. So I think Mr D should have disclosed both these facts in his answers to the application questions. And that, by not disclosing them, he made a misrepresentation. And I’m satisfied that was a qualifying misrepresentation within the meaning of CIDRA, because LV have provided confidential underwriting information which shows that they wouldn’t have offered cover to Mr D on the terms they did if he’d answered the questions accurately. Finally in relation to misrepresentation, I’ve thought about the remedy LV have applied. CIDRA sets out that, if a misrepresentation is deliberate or reckless, an insurer can decline any claims, void the policy and retain any premiums paid. But, if it’s careless, CIDRA says the remedies are based on what the insurer would have done if the customer had taken reasonable care not to make a misrepresentation.

-- 2 of 3 --

LV have treated Mr D’s misrepresentation as careless. The underwriting information they’ve provided shows that, because the hospital attendance was less than six months prior to the application, they would usually postpone offering any cover. But, because the application was only just short of this time limit, they’ve chosen to apply the criteria which apply to an event that occurred between six months and two years previously. I can’t say that’s unfair. Applying this means that LV would have offered the policy, but at a higher premium. Again, LV have provided evidence that, because of the misrepresentation he made, Mr D only paid them 59.27% of the premium they would have charged. So it’s fair, and in line with CIDRA for them to only pay the same proportion of the sum assured to settle Mr D’s claim. Mr D says this isn’t fair because he had had continuous cover with LV since 2015. I’ve considered this, but I think the documentation LV sent to Mr D in late 2022 made it clear he’d taken out a new policy and cancelled the previous one. Our investigator advised Mr D that, if the impact of buying a new policy wasn’t clear to him, that is an issue he’d need to pursue with the broker who sold his 2022 policies. I agree that it was for the broker, not LV, to explain his options taking out the new policy and cancelling the old one, and the consequences of doing so. But that would be the subject of a separate complaint. It doesn’t mean LV have done anything wrong. And so I don’t think they need to do any more to resolve Mr D’s complaint. My final decision For the reasons I’ve explained, I’m not upholding Mr D’s complaint about Liverpool Victoria Financial Services Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr D to accept or reject my decision before 27 April 2026. Helen Stacey Ombudsman

-- 3 of 3 --