A consumer told me her disappointing experience with the adjudication in FIDREC.
She was not properly advised by the insurance agent and signed up for a life insurance policy. The agent had assured her that she could reduce the premium in the future, but did not tell her that she would suffer a large loss in her savings. The agent did not explain the concept of the surrender value.
She had taken a premium that is bigger than what she could afford to pay over the term of the policy. She was able to pay the higher premium in the initial years due to past savings.
Unfortunately, she had signed on the application form that she did not require any advice. She did not understand what it meant.
The final decision by FIDREC was not in her favor. She had to suffer the loss in the excess premium that she had paid, if she were to reduced the premium to a level that she could afford.
She had signed a confidentiality agreement with FIDREC that she would not disclose the proceedings in FIDREC. She felt that she was not adequately advised at the FIDREC hearing and the final decision was unfair to her, as it ignored the lack of proper advice given by the agent.
I agree with her that the FIDREC finding was unfair. It was clearly a case that the insurance agent had recommended an annual premium that the policyholder could not afford to pay over the term. The FIDREC adjudicators should have taken this obvious fact into account in its decision. Apparently, the adjudicators decided to go along the written statements that she had signed at the time of application, even though she had argued that the statements were not clearly explained to her.
There is a law about unfair contract terms. A party cannot be held to the terms of a contract that the court decide is clearly unfair to that party, when the terms were written by the other party. It is clear to me that this concept should be applied to the statements signed by the consumer at the time of applying for a policy, and that the FIDREC adjudicators should observe the spirit of the law regarding "unfair contract terms".