The High Court has dismissed an appeal by Philomena Geoghegan against a Financial Services Ombudsman decision that her complaint about an insurer’s refusal to pay a critical illness claim was not substantiated.
Kearns P. delivered judgment on 27 March 2015. The court said its role was to decide whether the Ombudsman’s decision was vitiated by a serious and significant error, applying a deferential standard. It concluded that the Ombudsman had not erred on the information before it.
Ms Geoghegan and her husband took out life assurance in 1998 when applying for a mortgage to build a family home at Ring, Tyrrellspass, Co. Westmeath. They added critical illness cover the following year. In 2009, after her husband was diagnosed with cardiomyopathy, they sought payment under the cover. Irish Life refused the claim, saying the medical evidence did not satisfy the policy’s definition of a heart attack.
The Ombudsman investigated whether the insurer had assessed the claim in accordance with the policy terms. It found that the medical evidence supported the refusal. Because of a statutory six-year limit, the Ombudsman could not investigate the circumstances in which the policy was sold or what information had been given at the time.
Ms Geoghegan argued that she and her husband understood the cover to apply to all major illnesses, and that they would not have bought it had they understood it covered only specified conditions. Her solicitor also presented documents said to show that the insurer had accepted cardiomyopathy claims from other policyholders whose cover began around the same time. Those were submissions and material presented to the court; the judgment does not make an independent finding about the other claims.
The court noted that the annual notices changed the cover’s description in 2006 from “critical illness cover” to “accelerated specified illness cover”. It also noted evidence from an insurer team manager that the change was intended to clarify that cover was limited to specified illnesses. The judge said the change could suggest confusion among policyholders and that an empathetic response might be warranted. However, the proposal document expressly listed the illnesses covered, and the documents showed the critical illness cover was added to the existing life assurance policy rather than issued as a separate policy.
The court could not decide the alleged mis-selling because the Ombudsman had been barred by the statutory time limit from considering it. It also said it could not compel the insurer to change its position. The appeal was dismissed.