Western Provident Association Limited · DRN-6241801

The complaint Mr and Mrs W are unhappy that Western Provident Association Limited have said they will stop funding appointments related to Mrs W’s treatment for blood cancer. What happened Mrs W is the beneficiary of her husband’s employer’s group private medical insurance policy. For some time Mrs W has been claiming for payments related to appointments and treatment for blood cancer. These were paid by the previous underwriters of the group scheme. Mrs W complained as WPA have said they’ll no longer pay claims for any outpatient appointments. WPA said that following engagement with Mr W’s employer, who I’ll refer to as ‘G’, they were able to continue to make payments on a discretionary basis for a further scheme year. However, during a later review, G didn’t continue to allow discretionary payments for outpatient appointments and so only eligible treatment would be covered. This meant that consultations, blood tests and scans undertaken on an outpatient basis were not eligible under the NHS Cancer Cash Benefit. Unhappy, Mrs W complained to the Financial Ombudsman Service. Our investigator looked into what happened and didn’t uphold the complaint. In summary, she thought WPA had acted fairly as it was G’s discretion to cover the payments and WPA had given reasonable notice that cover would be withdrawn. Furthermore, she thought WPA had reasonably concluded outpatient appointments weren’t covered. Mrs W didn’t agree and asked an ombudsman to review the complaint. She said she wanted confirmation her future chemotherapy treatment would be paid under the NHS benefits and said that the ‘day patient’ definition was unclear. She explained that her chemotherapy appointments were clearly not outpatient appointments but were day patient appointments. In response to further queries from our investigator WPA confirmed that it was G that had agreed to cover ineligible claims on a discretionary basis and were funded by them. So the payments were not made from insured funds as the liability was met by G. The investigator remained of the view that WPA had acted fairly. Mrs W didn’t agree and so the complaint was referred to me to make a decision. At my request the investigator asked for greater clarification on the construction of the scheme and an overview of how the claims had been funded by WPA and G. In February 2025 I issued a provisional decision explaining that I wasn’t intending to uphold the complaint and that there were aspects of the complaint I didn’t have the jurisdiction to consider. I said: At the outset I acknowledge that I’ve summarised this complaint in far less detail than Mr and Mrs W have, and in my own words. I won’t respond to every single point made. No discourtesy is intended by this. Instead, I’ve focussed on what I think are the key issues here.

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The rules that govern our service allow me to do this as we are an informal dispute resolution service. If there’s something I’ve not mentioned, it isn’t because I’ve overlooked it. I haven’t. I’m satisfied I don’t need to comment on every individual point to be able to fulfil my statutory remit. I’m sorry to read of the circumstances which have caused Mrs W to claim. I can appreciate it’s been very difficult dealing with her condition and the associated treatment. I have a lot of empathy for the circumstances she’s described. The construction of the healthcare scheme The construction of the group health insurance scheme is relevant to the complaint points that the Financial Ombudsman Service can consider. In summary, G provides a fund which is administered by WPA on their behalf. Costs above a certain amount are then insured by WPA. This means that there are two pots of money, one which is linked to the contract of insurance underwritten by WPA and one which is linked to G but is administered by WPA. Discretionary payments are made using G’s funds, not WPA’s. Mrs W’s treatment has been funded by a combination of the two sources of funds. The total payment made from G’s funds between 2023 and 2025 (which are not linked to the contract of insurance) are £19, 750 for outpatient blood tests, consultations, scans and other tests. The total payments made under the contract of insurance is £6, 589 for chemotherapy, zoledronic injections, wig benefit and inpatient stays. The jurisdiction of the Financial Ombudsman Service to consider discretionary payments made by G The Financial Conduct Authority’s Dispute Resolution Rules (DISP Rules) set out what cases the Financial Ombudsman Service can consider. DISP 2.3 sets out what activities fall into our jurisdiction. It explains, amongst other things, that for us to consider a complaint, the activity the complaint is about needs to be ‘regulated’. DISP 2.3.1 states: The Ombudsman can consider a complaint under the Compulsory Jurisdiction if it relates to an act or omission by a firm in carrying on one or more of the following activities: regulated activities …or any ancillary activities, including advice, carried on by the firm in connection with them. Mrs W’s central complaint point is that the discretionary payments should continue as they previously have. Therefore, I need to determine whether the discretionary payments made by G fall within the jurisdiction of the Financial Ombudsman Service. I’m not persuaded they do for the reasons I’ll go on to explain. A ‘regulated activity’ under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 includes: • Effecting contracts of insurance as principal (Article 10(1));

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• Carrying out contracts of insurance as principal (Article 10(2); and • Assisting in the administration and performance of a contract of insurance (Article 39A). Some employers operate medical insurance schemes for their employees, rather than providing cover under a more traditional corporate/company medical insurance policy. In these circumstances, the insurer or its agent, provides an administrative function - assessing claims and making payments etc - but the funds to support the payment of claims are provided by the employer. In this case there are two funds, one of which is an insurance contract underwritten by WPA, and the other which is G’s discretionary fund. I’ve considered whether G’s element of the scheme is a contract of insurance. I need to consider this because to be carrying out an insurance-related regulated activity, a contract of insurance must be the subject of the regulated activity. I’ve taken into account Chapter 6 of the FCA’s Perimeter Guidance Manual (PERG 6) which sets out guidance about establishing whether an arrangement is a contract of insurance – for regulatory purposes. In summary, PERG 6.7.1 says that medical schemes established for employees are likely to be insurance schemes, whether the employer operates the scheme itself or contributes to a fund from which payments are made upon the occurrence of specified injuries/illness. However, this isn’t the case where an employer has absolute discretion about whether the employee receives the benefit, and about the amount of benefit they receive. In addition, if the scheme is set up on that basis, it doesn’t matter whether, in practice, the discretion is never exercised by the employer (or, presumably, other paying party) to refuse a valid claim. Here, there is significant discretion within the scheme. In particular, the scheme is not under an obligation to pay claims where treatment is ineligible. Nor has G or WPA assumed the risk of covering payments regardless of the level of funds in the scheme. This leads me to the conclusion that the scheme is not a contract of insurance. I have determined that the scheme doesn’t amount to a contract of insurance. But for completeness even if there was a contract of insurance, the regulated activity definition isn’t made out. This is because WPA doesn’t amount to effecting or carrying out a contract of insurance as principal. Its participation in the scheme is not as principal, but as administrator of G’s funds. Likewise, WPA’s administration of the scheme can’t be considered as assisting in the administration and performance of a contract of insurance because it is acting on behalf of the G, not the policyholder. In conclusion, WPA is not carrying out a regulated activity with regard to the healthcare scheme when dealing with the administration of G’s discretionary funds which Mr and Mrs W have complained about. The means my provisional decision is that this service doesn’t have the power to consider the main elements of Mr and Mrs W’s complaint as they relate to the discretionary payments made by G which do not form part of the insurance contract.

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Payments made under the contract of insurance by WPA Some payments have been made by WPA, as underwriters of the contract of insurance. That includes appointments for chemotherapy and specialised scans. One of Mrs W’s complaint points is that these are eligible for payment under the scheme and that WPA have unfairly considered them to be outpatient appointments. The terms define outpatient as: A patient who attends a hospital, consulting room, or out patient clinic for medical reasons and is not admitted as an in-patient or day-patient. Inpatient is defined as: A patient who is admitted to a hospital and occupies a bed overnight or longer for medical reasons. Day-patient is defined as: A patient who is admitted to a hospital or day-patient unit for medical reasons because they need a period of medical supervised recovery but do not occupy a bed overnight. The policy also outlines NHS Hospital cash benefit on page 17 which states: “you choose to receive: in-patient treatment or day-patient treatment as an NHS patient instead of as a private patient, you may claim a cash benefit. Treatment must be eligible treatment under the terms and conditions of your scheme and eligibility for this benefit is subject to the limits set out in your benefit schedule. (…) NHS Hospital Cash Benefit (cancer) • per night for each night spent as an NHS in-patient; • per day for each NHS day-patient admission. As stated in the Benefit Schedule, the Scheme will pay: ‘Up to a maximum of 34 days NHS In-patient or NHS Day-patient – £250 per night/day’. Based on the evidence that’s available I’m satisfied that WPA have accepted that chemotherapy and infusions have been undertaken on a day-patient basis but that blood tests and scans are usually undertaken on an outpatient basis. However, I don’t think it’s unreasonable for WPA to require evidence that any appointments amount to eligible treatment under the policy. My role is to consider what has already happened. I can’t consider what may happen in the future and direct WPA to pay claims on an ongoing basis or direct them to accept specific forms of evidence in support of a claim. If Mrs W is dissatisfied with the requirement to evidence future treatment, then she’ll be entitled to complain to WPA about this (provided the funds are drawn from the money linked to the contract of insurance).

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Customer Service Issues I appreciate that there were changes to the policy over time and the underwriter of the policy. This reflects changes made to G’s structure. That’s not something WPA is responsible for and I’m satisfied they’ve treated Mrs W fairly by continuing to engage with G about the ineligible treatment and what’s covered under the insurance policy. Mrs W also raised that she was told over the phone that the extension to the discretionary payments could continue past December 2025. WPA accepts that wasn’t correct. However, I note it was rectified very quickly in a letter which clarified the position. And, in any event, this wasn’t WPA’s decision. So, whilst I appreciate the news was distressing for Mrs W, I’m not persuaded it’s fair and reasonable to award compensation given that the clarification was given so quickly. Overall, I’m satisfied that WPA offered a reasonable level of customer service to Mrs W and communicated with Mrs W sufficiently clearly about the policy benefits. So, I’m not persuaded that there is a reason to award compensation in the circumstances of this case. WPA accepted my findings. Mrs W responded to say that she wasn’t well and, given the time she’d already spent on the complaint, she wasn’t going to be able to spend time looking at whether her points had been addressed. So, I need to make a decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’m sorry to hear that Mrs W is unwell and I empathise with her position that she doesn’t wish to spend more time on her complaint. As neither party provided any new evidence or made further comments there’s no reason for me to reach a different conclusion to my provisional decision. So, for the reasons outlined above, and in my provisional decision, I’m not upholding this complaint in relation to the points which are within my jurisdiction to reach a finding on. My final decision I’m not upholding this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs W and Mr W to accept or reject my decision before 20 April 2026. Anna Wilshaw Ombudsman

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