Howden Employee Benefits & Wellbeing Limited · DRN-6060068

The complaint Mr B has complained that Howden Employee Benefits & Wellbeing Limited (trading as Howden Life & Health) mis-sold him a private medical insurance policy in May 2024. What happened In May 2023, Mr B took out a policy with another insurer. He made his own decision to buy this online, without any advice. This was a moratorium policy, meaning that any medical conditions he’d had in the previous five years would be excluded from cover until a two-year trouble-free period had passed. In May 2024, with advice from Howden as a broker, he arranged to buy a new policy with a different insurer. This was a ‘switch moratorium’ policy, meaning that the terms of his previous policy transferred over onto the new policy. In June 2025 the insurer declined a claim for a shoulder condition as it fell within the terms of the moratorium. Mr B says he wasn’t advised about the moratorium and that he was explicitly advised by Howden that there were no exclusions. He therefore thinks the policy was mis-sold. Our investigator thought that Howden had acted reasonably and that the policy was not mis- sold. Mr B disagrees and so the complaint has been passed to me for a 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. The relevant regulator’s principles say that a firm must conduct its business with due skill, care and diligence. And that it must pay due regard to the interests of its customers and treat them fairly. Financial businesses must pay due regard to the information needs of their clients and provide them with information which is clear, fair and not misleading. So, I’ve taken these principles into account, amongst other things, including the available evidence, to decide whether I think Howden met its regulatory obligations and acted fairly and reasonably. Although Mr B says he’d never heard about being on a moratorium, that was the nature of the policy that he had taken out independently in 2023. The moratorium date of that policy was 15 May 2023. So, it excluded any pre-existing medical conditions (PEMCs) that had been present in the five years previously (so, from 15 May 2018), until a two-year trouble- free period after the start date (so, until 15 May 2025). The policy sold to him by Howden in 2024 was a ‘switch moratorium policy’, meaning that the terms of the moratorium were transferred over without any changes.

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Moratorium policies differ from fully medically underwritten policies. So, when taking out a moratorium policy, the insurer doesn’t require disclosure of a full medical history. It’s only when someone makes a claim, that the insurer will look into that, to ensure that the claim meets the terms of the moratorium. The only disclosable conditions at the point of sale are those within the last 12 months or that are ongoing. The sales process took place over a number of calls. The substantive calls happened on the 8 May,10 May and 15 May 2024. During the first call, Mr B says he’s been with his existing insurer over a number of years, but on different policies. He says his benefits get reduced down and down due to PEMCs, so he wants to understand if he’s going to get a poor level of coverage by going somewhere else. The adviser replies that the key would be to ensure that any move doesn’t bring about any more exclusions or at least, if it is, to understand those. Mr B is asked about any medical treatment in the last 12 months, to which he discloses that a blood test had shown a low kidney function score. He asks whether that means he can no longer be covered for kidney conditions in the future. The adviser says that hopefully shouldn’t be the case as investigations had ended, so a new insurer shouldn’t create an exclusion for that. In the fact find that takes place on 10 May 2024, Mr B also discloses that he is currently prescribed medication for gout. As the kidney and gout conditions are those that occurred within the last 12 months or were ongoing, these are the ones that needed to be declared to the insurer to see if they would apply an exclusion. At that point in time, the adviser has two policies in mind that he thinks might be suitable. He refers back to underwriting who confirm that the first insurer would exclude conditions relating to kidney issues and gout. The second insurer (whose policy Mr B ends up purchasing) would not place any exclusions on those conditions. Mr B says he has an email from the adviser saying they’d be no exclusions. I’ve seen an email from the adviser dated 15 March 2024 in which he states: ‘Are you free to speak this afternoon. I have had some information back and now have an option without any exclusions’. I’ve listened to the call that subsequently took place. In it, the adviser says: ‘So when we spoke, it was Friday we spoke, I went away and spoke to two different insurers to see what they would do underwriting-wise. Now, one was a company called (Insurer 1), the other one was a company called (Insurer 2). (Insurer 1) have come back and said to me that they would place exclusions around the investigations you had done after the EGFR score and came back with an adverse result, and the gout. (Insurer 2) have come back and confirmed that they will not place any exclusions on either. On that basis, that is my recommendation for you is the (Insurer 2) policy.’ Based on the available evidence, I’m satisfied that Mr B should have understood that the reference to no exclusions was in relation to kidney issues and gout. As already mentioned, the insurer declined a claim for shoulder treatment on the basis that it was caught by the moratorium, rather than it being set out as a separate exclusion. The adviser still needed to explore Mr B’s medical history to ensure that the policy was suitable for him.

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The full fact find takes place in the call on 10 May 2024. Mr B is asked if he’s had any claims in the last five years. The adviser says the reason he’s looking at anything in the last five years is because of the new moratorium that was put in place when he’d taken out the policy in May 2023, so, anything previous to that will still affect his advice. Mr B mentions he’d had three shoulder surgeries, the last one being in 2018. He said he’d seen his consultant again about his shoulder in 2022 but there had been no follow up after that. The adviser asks: ‘And nothing since? Am I right in saying nothing ongoing or planned?’, to which Mr B replies: ‘Yeah, nothing ongoing’. The adviser further asks: ‘Anything else to add to the shoulder or has there been any more in the last five years?’ Mr B replies that after the 2018 surgery, there was that one follow up only. After the medical questions had been completed, the adviser gives his recommendation. He says: ‘....switch underwriting, which is what I'm recommending for you today. And the best advice anyone can give you is to get a continuation of cover from one insurer to another. This means that conditions you're covered for now will remain covered, subject to meeting the new insurer's criteria. However, conditions that are excluded on your current plan will remain excluded.’ The next time the adviser speaks to Mr B is on 15 May 2024, where I’ve already explained that the adviser confirmed that the policy he was recommending wouldn’t contain any exclusions for the declarable conditions of his kidneys and gout. Mr B asks to be emailed details of the policy for him to peruse. The covering email he is sent states: ‘Underwriting description: • This option allows you to move from one insurer to another on a no worse terms basis, meaning anything that you are currently eligible for will remain eligible on the new policy.’ After agreeing to buy the new policy, he is sent the certificate of insurance, which states: ‘Moratorium date: 15/05/2023 Underwriting: Switch moratorium Endorsement Switch Moratorium : Your membership is subject to our Moratorium Underwriting therefore any pre-existing conditions that occurred during the last five years prior to the moratorium date (as shown above) will be excluded from cover for the first two years. Cover excluded by the moratorium may be reinstated at a later date if the medical condition, symptoms or treatment has not recurred for a continuous period of two years since the date it was last treated.’ Although Mr B says he was given a specific verbal assurance that there were no exclusions, which overrides anything he received in writing, I’m not persuaded that’s the case. I’ve heard that the adviser talked about ensuring that a move wouldn’t bring about more exclusions, or any unexpected exclusions and, at times, he was talking about exclusions purely in relation to his kidneys and gout.

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The adviser does talks about the moratorium that was put in place when Mr B took out the policy in 2023 and how the terms of that policy would switch to the new policy. I’ve thought about whether there was perhaps a bit of shorthand at play regarding the moratorium, with an assumption being made that he had a greater understanding of his existing policy, and so would have been conversant with what it meant by the switch moratorium carrying over on its existing terms. And whether this, combined with the information he provided about his shoulder condition being resolved in 2022, led to a lack of emphasis being given to moratorium terms. I’ve also thought about whether confusion was created when talking about possible exclusions around declarable recent conditions, as opposed to non-declarable older conditions. However, having listened to all of the calls, I’m satisfied that Mr B was given sufficient and timely information about the terms of the moratorium. Overall, I consider he should have understood that cover for a shoulder condition (and hand and knee conditions that he had also mentioned) would be subject to the moratorium terms that had been set when he’d bought the previous policy a year before. Mr B says that, if he had understood that, he wouldn’t have changed policy. To be clear, even if he’d renewed his existing policy, the claim would still have been declined by that insurer, as the moratorium terms were the same. The claim was declined because he’d had symptoms in the two years from 15 May 2023. Mr B has also said that he could have waited a few months before making a claim. But it’s not just the date of treatment that is relevant. It’s also about when his symptoms started and, it seems apparent from the timing of his claim, that he’d been having symptoms prior to 15 May 2023. So again, a later claim would likely have been declined, whether with the current insurer or the previous one. He’s said he would have avoided switching to preserve eligibility for cover once the moratorium period expired. But his eligibility for cover would have been the same on the new policy once the moratorium period had ended. Therefore, he is no worse off as a result of purchasing the new policy. The policy was suitable for him as it provided comparable benefits at a cheaper cost, on the same moratorium terms. I’m sympathetic to Mr B’s situation. He found he wasn’t covered for his shoulder treatment and has had to pay for it himself, contrary to his expectations. However, the matter at hand is whether Howden has done anything significantly wrong – and I’m unable to conclude that it has. I’m satisfied that it did not mis-sell the policy and that its sales process was clear, fair and not misleading. It follows that I do not uphold the complaint. My final decision For the reasons set out above, I do not uphold the complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 16 April 2026. Carole Clark Ombudsman

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