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ombudsman news

issue 7

July 2001

paying for medical reports

your comments invited
please reply by 14 September 2001

Recently a number of policyholders and firms have sought our view on the payment of fees for medical reports. Before we reach a definite view on this issue, it would be helpful to have comments from firms, customer representatives, the medical profession and other interested parties.

Medical reports are routinely required when assessing claims relating to medical conditions in travel, loan protection and critical illness policies. Typically, policyholders will be asked to support their claim by providing the insurer with a medical report describing their present condition (or in some cases, their medical history). Firms may require the information to help them assess an original claim or whether it is appropriate for a policyholder to continue receiving benefits.

Increasingly, doctors are levying charges for providing such information: typically £30 for a routine report. Practice appears to vary amongst insurers as to whether the insurer or the policyholder is expected to meet such costs.

In general, it is for policyholders to demonstrate that they have a valid claim. However, our initial view is that it represents unreasonable contract terms if insurers require policyholders to provide evidence they can only obtain at a disproportionate cost, when compared with the likely level of benefit from a successful claim.

The circumstances of the customer making the claim may also be relevant. For example, requiring a policyholder who has been taken seriously ill overseas to obtain and pay for medical reports appears more onerous than asking a patient to obtain a report as part of a routine visit to their doctor.

It is also relevant to consider the nature of the request for a medical report, and at what stage it occurs in the claims process. In essence, the more routine the information - required and the earlier in the process of assessing the claim that it is called for, the more likely we are to regard it as reasonable for the policyholder to be responsible for obtaining the information. However, if the insurer is investigating the possible relevance of a policy exclusion then it will be for the insurer to meet any costs.

The following illustrations give examples of situations in which medical reports are needed. We welcome respondents' comments on who they think should, in each case, be paying for the report.

illustration 1

  • The policyholder had taken out a loan protection policy and became ill with a serious heart condition. The insurer accepted the original claim after receiving written confirmation from the policyholder's consultant. After six months, it declined further payments under the policy unless the policyholder obtained, at his own cost, monthly reports from his doctor confirming that he remained unfit for work.

illustration 2

  • The policyholder was taken seriously ill abroad. There was some question about whether the illness pre-existed the policy. The travel insurer required the policyholder to obtain a full report on his medical condition from his doctor.

illustration 3

  • The policyholder made a claim under a permanent health insurance policy. The insurer received initial reports from the policyholder's doctor. However, the insurer became concerned that the policyholder's condition was not of such severity as to justify her continuing absence from work. It asked the policyholder to obtain responses from her doctor to specific questions about her condition.

We would welcome comments on these issues. In particular, it would be helpful if respondents would let us know whether they:

  1. would welcome guidance from the ombudsman on these issues;
  2. believe it is practical to determine the circumstances in which insurers should meet these costs and the circumstances in which policyholders should do so.
your comments

Please let us have your comments by 14 September 2001.

Tim Knott
Insurance Division
Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR

We will set out our conclusions on these issues in a subsequent edition of ombudsman news.

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.