A life policyholder who did not disclose cardiology tests has lost a dispute with his insurer before New Zealand’s insurance ombudsman.

The insurer was denied the opportunity to properly evaluate the risk, the Insurance & Financial Services Ombudsman Scheme says in its ruling.

The policyholder, given the pseudonym “Danny”, applied for life and trauma cover in March 2016.

His adviser wrote on the application that Danny was concerned he had forgotten something and asked the insurer to refer to his doctor.

The unnamed insurer said it would not contact the doctor and Danny would need to provide any medical information he had not disclosed.

Danny suffered a stroke in August 2023 and made a claim two months later.

When the insurer requested medical information, it found Danny had undergone cardiology investigations in October and November 2015, which were not disclosed on his application.

The insurer asked its underwriter what cover would have been provided if the information was disclosed, and as a result it cancelled the trauma cover from inception and applied a 75% loading to the life cover. It refunded the trauma premiums.

Danny complained because he did not believe the cardiology investigations were serious or material and said he had forgotten about them.

But the ombudsman says he breached his duty of disclosure. It checked with two senior underwriters and both said they would have deferred offering cover or offered it under different terms and conditions.

Find the ruling here.