OLHI – OmbudService for Life & Health Insurance | Resolution of your Canadian Insurance Concerns | OLHI

Mistaken application (critical illness)

Medical Condition

Mr. F. applied for Critical Illness insurance through and submitted his application with the help of his insurance advisor. The insurer rescinded coverage, saying that he had misrepresented his medical history on his application.

Mr. F. contacted OLHI after receiving the insurer’s final position letter. He told the Dispute Resolution Officer (DRO) that although he understood his insurance policy could not be reinstated because of his medical history, what he wanted from the insurer was a written apology for alleging that he had misrepresented himself. Mr. F. was concerned that this allegation could impact his ability to purchase insurance products in future.

The DRO recommended the complaint be escalated to an OmbudService Officer (OSO) for further investigation. The OSO learned from Mr. F. that, when he applied for insurance, he had told his advisor about some upcoming medical tests scheduled for a later date – but the advisor told him not to worry about it because these were post-application. Mr. F. also noted to the OSO that his advisor had put the wrong date on the application and had not asked Mr. F. one of the questions. Instead, the “no” box was selected – something Mr. F. asserts he would have never said “no” to. He explained that, when he was reviewing a copy of the application submission that was sent to him, he noticed the error and reached out to his advisor immediately to revise it.

Mr. F., however, did not hear back from his advisor. Instead, he received a letter from the insurer, rescinding his insurance coverage because some medical information had not been disclosed.

In its final position letter, the insurer outlined that it’s the applicant’s duty to review all the questions and answers on an application, for accuracy, before signing. A signature indicates that the review was completed and the information provided is accurate. The insurer stated that Mr. F.’s upcoming medical tests should have been noted on the application and also advised that the reason for the underwriting decision would remain confidential within the insurer’s files – and that they would review their application process with the advisor.

After conversations with the consumer and the insurer, the OSO determined that without documentation to corroborate Mr. F.’s position that the advisor had incorrectly filled in the questionnaire, OLHI could not pursue an exoneration or apology. A signed application, as a legal document, implies that the applicant has reviewed and agreed with all the contents. Whether intentional or an innocent mistake, the misrepresentation occurred.

The OSO did however reiterate to Mr. F. that while his future efforts to obtain insurance would reveal his medical history, the reason for a rescission would not be revealed – but that Mr. F. will have to share this detail nonetheless in the interest of full disclosure.

Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.