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MCE Insurance cancelled policy on a technicality - Conviction quashed ICOBS

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Sounds like they believe the Insurance should not have been cancelled or their process is flawed in that they can't really cancel on the basis of such a technicality unless they are sure the Policyholder is given advance warning of the cancellation. As it is a legal obligation to have insurance, their cancellation processes have to be robust enough to satisfy the FCA.

 

The policy was cancelled, any refund processed and relevant documents issued to cover the cancellation ? If they can't supply full copies of documents and/or data processed, then it sounds like a total balls up. Someone has cancelled the policy manually from a list of outstanding CBT proofs and documents were not issued giving advance notice of cancellation.

 

The reason why they are only issuing confirmation of Insurance being in place on the date of the accident, is that the policy had already been cancelled prior to this. I think the bike was written off (?) and would not have required any insurance after this date if it was to be off the road and SORN. The Insurance underwriters can't suddenly just revoke the cancellation, but they can confirm cover on the date of the offence/accident.

 

Presume there is now a claim for the bikes market value and anything else they can claim for. If there was any legal cover, it might also include expenses in going after the at fault third party.

 

Should the CPS now inform the court of this information on receipt, so a Judge can quash the conviction without an appeal hearing being necessary ?


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They've also eventually made the statutory disclosure under the DPA. MCE insurance company will also in breach of the DPA obligation and they had to be threatened and forced to make the disclosure as well. It seems to me that this is the company which is not sufficiently invested in transparent and ethical practice. The subject access request disclosure has revealed only that apparently they attempted to contact the OP to warn him of the cancellation and when they are unable to make contact they gave up and they simply cancel it anyway.

 

As I have already indicated, it concerns me enormously because one wonders how many other of their customers have had their insurances cancelled on unlawful technical grounds and also how many innocent victims of accidents suddenly found that they are having to take action against an apparently uninsured driver when in fact it is simply the reckless and irresponsible and unlawful cancellation by an insurer – which apparently is based in Gibraltar – not that that puts them out of reach.

 

I have no idea what all the losses are yet, and we will start going through all of that after the appeal this Friday. The CPS have been written to and they have been sent a copy of the letter of indemnity and we are hoping that they will do the sensible thing and call it all off with a minimum amount of fuss and trouble to everybody including the court. On the other hand, if there is a jobsworth in the CPS then they may still try on. If they do then I'm certain that there will be a further appeal to the High Court. We'll see.

 

Also I have to comment on the lack of engagement by the OP. He certainly doesn't have the right attitude to have dealt with this because he could have brought it all to an end a lot earlier. On the other hand I now know something of his circumstances and in particular as a result of this conviction he has been forced into a situation where he does not have easy access to a computer at reasonable times of the day – and that is why I am posting up in his stead, for the moment.

 

I sincerely hope that if the appeal is successful and also if a County Court action is successful that we will be able to raise issues with the FCA and also with the media to start asking questions about peremptory and unlawful cancellation of insurance policies. It is very clear that cancellation insurance policy for a mere technical reason is a breach of the relevant law. Even proper notification of cancellation does not make the cancellation lawful. There is nothing in ICOBS which allows that. ICOBS is very clear that insurers are not entitled to cancel or to impose technical conditions upon the life of an insurance policy or upon the decision as to whether or not to accept a claim.

 

This may seem unfair on insurance companies – although frankly I don't think it is – but the stakes are far too high, especially in the case of innocent victims of road accidents who could face a lifetime of non-compensated hardship simply because an insurer has decided to wriggle out of their contractual/legal responsibilities on the basis of some self-serving technicality.

 

If they want to be in the insurance business then it comes with this baggage. If they don't like it then they should get out and do something else.


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The 7 days notice of cancellation is supposed to be a minimum, but companies use it as standard. It is too short, as in a big company with a large print centre, you will have thousands of documents printed on the same day. It can be a couple of days before the letter is posted and even if sent first class, the Policyholder might only have say 2 days notice of cancellation. If they don't check their post because they don't think it is important or they are away, then it can be a massive problem. They might have just gone on holiday, parking in an airport carpark and then get stopped by Police on their way home weeks later. The car would then be seized, with all the expenses and prosecution that would follow.

 

If Insurers were required to provide a minimum of say 21 days notice of cancellation and the cancellation had to be sent by recorded delivery to the addrsss on record, i think you would see a massive reduction in cancellations. Insurers would change their processes to avoid cancelling policies due to not receiving some documents and bounced DD payments.

 

This is more of a debate on the issue, than related to the OP, but given the seriousness of what happened to the OP, then i think extending minimum notice of cancellation period by Insurers is a possible solution to changing behaviours.


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I agree, it is a debate on the issue and it's a good idea.

 

You are right that the industry seems to have adopted seven days as a standard – which is certainly too short. But even if the notice period was 21 days, it would still be unlawful if it was used as a basis for terminating a policy or denying loss because of some technical reason.

 

There is nothing new about the ICOBS rules. Going back hundreds of years in the common law of contract, the law has always recognised the difference between a fundamental breach of contract – breach of condition – and non-fundamental breach of contract – breach of warranty.

 

A condition of the contract is a term of the contract which goes to the heart/whole purpose of the contract and breach of which effectively undermines the contract and can deny the innocent party of essentially the entire benefit of the contract.

 

A breach of condition is a basis for saying that the contract is void.

 

A warranty is some mere technical aspects of the contract, breach of which simply produces some inconvenience but does not deprive the innocent party of the benefit of the contract.

 

This is exactly what ICOBS is doing. Nothing new – simply spelling it out for insurers who for years have managed to dodge their responsibilities simply because of technical defects and because they have been dealing with customers who have simply resign themselves because they didn't know any better to challenge the insurer.

 

It seems to me that it is absurd to allow an insurer to avoid his obligations on a fully paid-up insurance simply because of some problem which doesn't at all affect the risk. It seems to me that the correct solution is not to permit insurers to terminate or to decline policies, but rather, in the event of an accident, to withhold cover until all the technical defects have been remedied and also to withhold policy documents for the same reasons. It wouldn't be beyond the wit of the insurance industry also to come up with an electronic marker to indicate to any interested parties – including the police – that an insurance was in place but that there was a defect. This would protect everyone. It would save everyone money. And it would place pressure on the insured party to remedy the defect or face prosecution.

 

There might even be a basis for an additional offence of driving with a defective insurance.


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Update: –

 

The Crown Prosecution Service have now accepted the letter of indemnity and have agreed that there was an insurance in place and that the conviction should be quashed.

 

I think that this was the inevitable result.

 

Next stage will be to begin proceedings against MCA to recover all of the losses.

 

I think that a new thread will be started for that phase.

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Good result and without your help Bankfodder, i am not sure the OP would have achieved this.:whoo:


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Kind of you to say so. Not really me – it's really the lack of knowledge that consumers have in all areas and the impunity with which suppliers and sellers conduct themselves in respect of their clients. As you probably gathered by now, I consider that the peremptory cancellation of insurance is especially scandalous because not only does it hit the client, but also the innocent victims of accidents.

 

I see that MCE insurers are big sponsors of a British Superbike Association along with other people such as Pirelli, Stena Line, Lloyds bank and Santander bank, of course and several others.

 

It's about time that MCE were embarrassed about this and that their partners knew about it as well. I'm hoping that this case will help to do that. The appeal is actually tomorrow morning but it is just a formality now and afterwards I hope that we will start preparing for a County Court claim to recover all losses. I'm also hoping to attract some attention in the media about this.

 

What this definitely means is that cancellation of insurance policy on a technicality is unlawful and hopefully other people who have been affected by this in the past will find out about this thread and will decide to do something about it themselves.

 

As far as I can see, there is no limit on this. If people have been involved in an accident or have been convicted for driving without insurance at any time then if it has been caused by a technical cancellation of insurance policy and I'm pretty certain that we can help them undo the damage which has been caused by the insurer.


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I know someone accused of driving with no insurance that the insurer finally confirmed they should have been covered (the insurer made an error).

 

The CPS then withdrew the no insurance charge, but (in court...) stated they were proceeding with an alternate charge of failure to produce the insurance certificate!

 

The clerk to the court asked "are you sure?" in disbelief, and the prosecutor replied (in an embarrassed tone!) "I am instructed ....."!

(The conclusion was that they knew it was a nonsense, but were acting under instructions)

 

The case was held over. The solicitor for the accused noted that if the certificate CAN'T be produced (e.g. The insurers haven't provided it) that is a defence PROVIDED it is produced as soon as it can be.

 

So, get the certificate from the insurers, and produce it (at a police station, NOT to the court) as soon as you receive it, just in case the CPS decide to be difficult, to cover yourself.

 

http://www.legislation.gov.uk/ukpga/1988/52/section/165

S165 (4)(b) regarding producing "as soon as reasonably practicable".

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This is really great news.


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Yes it is. I have just heard that the quashing of the conviction has been confirmed by the court at Snaresbrook. Apparently they will now communicate with the DVLA which apparently will remove the points from his licence.

 

We will now be trying to go through the facts, the losses and other consequences of the unlawful insurance cancellation by MCE in order to decide how to proceed in the County Court to obtain compensation.

 

I have realised that MCE is a huge insurer – especially of motorcyclists and so I would recommend to anyone who drives a motorcycle or who knows any motorcyclists to find out if anyone has any contact with anybody else who has had their insurance peremptorily cancelled on a technicality. Of course, this doesn't only apply to motorcycles. It applies to all insurances – including cars, bikes, mobile phones, personal injury insurance, house insurance – everything.

 

I'm quite sure that there are huge number of people who are having their insurance cancelled or their claim is denied simply on some technicality such as has happened here. It's fairly safe to say that in every case that cancellation or loss denial would have been unlawful.

 

The OP showed the ICOBS regulations to the representative of the Crown Prosecution Service at the court and that representative responded that he had never heard of it. He simply said that the OP was very lucky that the insurer had responded because it was very unusual that they ever do respond. I'm quite sure that is true.


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Can i just make a point here about Insurers not responding when there is a complaint about a legal compliance issue.

 

If a consumer complains to an Insurers customers services or claims department, it is highly likely that the person dealing with the complaint does not have the qualifications, experience or knowledge to deal with all matters raised. They might not even really know ICOBS that well. Therefore they don't really respond to the complaint properly and the consumer is left exposed to the problems created for them.

 

If you want a proper response to any legal compliance issue, it is absolutely essential that the complaint is addressed to head or director of compliance at the Insurers head office. The letter must be made VERY clear that there is a legal compliance issue at stake and NOT just a general complaint to be passed on to customer services. In this case involving MCE, it appears it was only resolved because their compliance manager dealt with the communications received.

 

Even underwriting departments are variable, as some are really just customer services. They might have an actual head office underwriting section that deals with writing policies, setting premium rates and dealing with complex technical matters. They might deal with Police enquiries where there are required to issue confirmation of whether a person is Insured or not. BUT they are not always qualified to the same level as compliance officers. Compliance is a very different entity as they tend to look at things more from a legal point, rather than Insurance underwriting or process. They often have legal and insurance qualifications.


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I agree with everything you say except that I say that the responsibility still lies completely with the insurer. I don't think that you can expect ordinary people who no doubt very much under stress because of the insurance/accident circumstances to know exactly who to write to. I can imagine most ordinary people have never heard of "compliance" or realise that there is a compliance officer in the organisation.

 

Comply with what? Writing to a compliance officer predicates that the customer is aware of the compliance issue and aware of the requirements of ICOBS. Nobody knows about this. The Crown Prosecution Service don't know about it. The OP consulted several solicitors and they didn't know about it. They simply told him to put his hands up and that nothing could be done.

 

Insurance companies make their money out of selling insurance. They are regulated by the FCA and it is up to them to make sure that their staff development is good enough that there call centre staff recognise when they might be a possibility of a compliance issue. Any cancellation of insurance should be flagged up to some compliance clerk who is trained to look for the reasons and to decide whether or not there is a compliance issue which should be sent up to a senior compliance officer. Any loss denial which depends on the termination of an insurance policy should be treated similarly.

 

At the end of the day it is the insurer which commits the offence of breaching its statutory duty and therefore it is the insurer who has responsibility to guard against that.

 

It's all a question of investment and the trouble is that so far not enough people challenge the insurers on this and cost them sufficient money then it becomes worth their while to spend more money on staff development. On the other hand, they spend lots of money on loss denial and you might like to know that about 25 years ago I received an invitation to a very plush two-day event in London – mainly for insurers but also for lawyers who represented them – and it was called "Loss Denial".

 

I don't think I've ever seen a conference called "Compliance Obligations".


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good to see icobs does have a bit of bite :)

well done all.


IMO

:-):rant:

 

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good to see icobs does have a bit of bite :)

well done all.

 

ICOBS is very powerful . but it hasn't really been tested yet because the insurance company provided a letter of indemnity after being threatened but no one has admittedany liability or blame yet.that has still to come in a county court claim

Of course it was the ICOBS threatwhich produced the result . in exactly the way that BCOBS has produced dramatic results in banking.


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Ok l have a question.

 

You have said about the insurer cancelling the policy on a technicality or paperwork issue but what if they cancel the policy for no or unknown reasons.

 

Reason l asked is a few years ago my ex brother in law got pulled by police for no insurance. As far as he was concerned he was insured. They had not told him he was not they were still taking the payment out of his bank account monthly and even denied he was not uninsured when he called them the next day. He took all the details to the police and they said it was strange and eventually apologised and gave him the car back and as a gesture of good will did not charge him fees.

 

The company never reinstated the policy and after months he got a full refund but gave no answers.


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ICOBS is very powerful . but it hasn't really been tested yet because the insurance company provided a letter of indemnity after being threatened but no one has admittedany liability or blame yet.that has still to come in a county court claim

Of course it was the ICOBS threatwhich produced the result . in exactly the way that BCOBS has produced dramatic results in banking.

cheers.

your comment there above #85 is a good point. codification.

....There is nothing new about the ICOBSlink3.gif rules. Going back hundreds of years in the common law of contract, the law has always recognised the difference between a fundamental breach of contract – breach of condition – and non-fundamental breach of contract..........

IMO

:-):rant:

 

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So in theory anyone who has had their insurance cancelled for no good reason can now look for compensation and the removal of the cancellation from their record?

 

Won't this cost insurance companies millions?

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i had mine cancelled on me, as i had not sent in my proof of NCD in time a few years ago, what is annoying they have access to these things online, and after 3 years your points are removed and forgotten about, but can they demand you tell them upto 5 years, how can they make a judgement that i might get points again, and if i don't tell them my policy will be canceled, btw my license is clear, and more than 5 years ago lol

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I agree with everything you say except that I say that the responsibility still lies completely with the insurer. I don't think that you can expect ordinary people who no doubt very much under stress because of the insurance/accident circumstances to know exactly who to write to. I can imagine most ordinary people have never heard of "compliance" or realise that there is a compliance officer in the organisation.

 

Comply with what? Writing to a compliance officer predicates that the customer is aware of the compliance issue and aware of the requirements of ICOBS. Nobody knows about this. The Crown Prosecution Service don't know about it. The OP consulted several solicitors and they didn't know about it. They simply told him to put his hands up and that nothing could be done.

 

Insurance companies make their money out of selling insurance. They are regulated by the FCA and it is up to them to make sure that their staff development is good enough that there call centre staff recognise when they might be a possibility of a compliance issue. Any cancellation of insurance should be flagged up to some compliance clerk who is trained to look for the reasons and to decide whether or not there is a compliance issue which should be sent up to a senior compliance officer. Any loss denial which depends on the termination of an insurance policy should be treated similarly.

 

At the end of the day it is the insurer which commits the offence of breaching its statutory duty and therefore it is the insurer who has responsibility to guard against that.

 

Looking at forums, this is a widespread problem, not only are customers cheated out of money by having the yearly policy they paid for vanish, but they are also cheated every year for the rest of the lives through having to pay over the odds for all types of insurance that they may need.

 

If this practice is unlawful, then is this not to insurance companies what PPI was to banks?

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Looking at forums, this is a widespread problem, not only are customers cheated out of money by having the yearly policy they paid for vanish, but they are also cheated every year for the rest of the lives through having to pay over the odds for all types of insurance that they may need.

 

If this practice is unlawful, then is this not to insurance companies what PPI was to banks?

 

IMO yes. The thing is l can see this being as big if not bigger. This could cover not just car but all vechile, House, life and all other insurances.


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Bankfodder, did the civil case ever get started, if so is there an update? I am very interested in this, I am considering bringing an ICOBS claim against an insurer myself.

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