Who is responsible for notifying policy changes?

Steve Wright

If an insurer makes benefit or other changes to its policies, are advisers responsible for notifying their mutual clients?

A couple of interesting issues around ‘who is responsible’ have come up in the last couple of weeks.

Firstly, the IFSO has recently ruled that a life insurer was at least partially responsible to pay a claim because it had not properly complied with its own business processes regarding notifying both clients (joint policyholders) when lapsing a policy. 

The IFSO determined that … ‘Under the Consumer Guarantees Act 1992, an insurer must exercise reasonable care and skill in administering/managing policies, including in relation to communicating important information about the policy.’