Legal Advice Please

[FullyComp]

Thought I would ask here first to check your opinions.

A client takes out car insurance and declares he is conviction free.

He makes a claim and the insurer finds out he has some serious convictions and void the policy from inception.

But they won't refund his premium either. We are of the opinion that he should get his premium back but the insurer says that there was a deliberate attempt to decieve them and so they are entitled to keep the money for a policy that never existed.

We ask the insurer for proof that (a) there was a deliberate intention to decieve and (b) that they are legally entitled to keep his money but they do not provide either.

We have supported the client through this explaining that we think he should be refunded and to take an action against the insurer.

The client has taken legal advice and says that, as his agent, we have to refund his money to him regardless of whether the insurer has or not.

My opinion is there has been no breach of contract as we have done what we were supposed to do, we have provided the client with a service and assistance and the dispute is between him and the insurer. Plus we have no legal evidence to prove that the client must have his money back or not. We are acting merely on personal opinion.

Where do we stand? If there is no indemnity from day one is there any legal precedent which states that the insured must have his money back and if so is the agent responsible for the refund even though we have not broken any contract?

Any advice would be appreciated.

[beazleyj]

My understanding is that if the Insurance Company null and void the policy, then they should reimburse the premium paid.

[FullyComp]

Thanks for your reply but my question is what obligation is there on the agent to refund it even if the insurer refuses to?

I don't see we have broken any contract so can the client act against us for recovery of his premium if he is legally entitled to it from the insurer?

[Mike Cranny]

In case of a non-disclosure ( depending on whether commecial or consumer) the insurers hold all the cards.
They can avoid the claim, and cancel giving a return minus expenses incurred in handling the claim, or they can void from inception.

In the latter the policy never existed, so they are not entitled to the premium, however they may well have a clause in their policy saying premium is forfeit, or they can simply keep it, and the client (in the case of fraud) can't use the courts to obtain it.

You may wish to formally cancel his agreement with you. You agreement with him is governed by your TOBA, TCF and what the Ombudsman would say.
You may not be entitled to any fee or commission, but the premium is a matter for the Insurer, not you.

[FullyComp]

Many thanks Mike.

This is basically what I thought.

He says his solicitor is writing to us stating that, as his agent, we are responsible for refunding the premium. I don't think we are but I don't want to get bogged down with a legal action.

The insurer has told me it does not have to state in the policy that they can keep the premium. They have also not given me any evidence that there was any deliberate fraud.

I am of the opinion that the insurer should refund the premium unless they can show legal proof that they are entitled to keep it. So I am stuck in the middle.

But if the matter is purely between the client and the insurer then I will refer it over to them. It was my legal obligation as the agent for the client that was concerning me.