Mulsanne Insurance Company Limited · DRN-6132682

The complaint Mr A complains that Mulsanne Insurance Company Limited (Mulsanne) unfairly handled his motor insurance policy following the discovery he was a victim of a “ghost broker” (GB). What happened Mr A arranged a motor insurance policy in February 2025, underwritten by Mulsanne, through a broker. Unbeknown to him, the broker wasn’t regulated, or authorised to carry out any insurance business. These are more commonly referred to as a GB. In June 2025, Mr A was involved in a road traffic accident with a third-party (TP) and so a claim was raised on his policy. During its investigations into the claim, Mulsanne identified that Mr A’s date of birth had been recorded incorrectly on the policy, which it considered to be a fraudulent misrepresentation. On that basis, it cancelled the policy. Unhappy with the cancellation, Mr A complained. Mulsanne didn’t uphold the complaint, as it was satisfied its decision to cancel the policy was fair. Mr A provided evidence of his communications with the broker, which led to Mulsanne accepting that he had been the victim of a GB. While this didn’t change Mulsanne’s decision to cancel the policy, Mulsanne agreed not to record the cancellation on industry databases. Unhappy with its response, Mr A referred his complaint to this Service. Our Investigator didn’t uphold the complaint. They were satisfied Mulsanne had treated Mr A fairly, and in line with the terms of the policy. Mr A disagreed and asked for an Ombudsman to make a final decision. In summary he said while the terms allowed it to cancel the policy, he didn’t find Mulsanne’s decision to cancel fair in the circumstances. Mr A also explained he was never provided with policy documents to check the details provided to the insurer, and the use of WhatsApp to arrange the policy wouldn’t have immediately alerted him to know he was dealing with a GB. And Mr A didn’t think it was fair he lost his entire premium for the actions of another party. So, the case has been passed to me to decide. 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’ve summarised the circumstances of this case in less detail than presented. But I want to assure both parties that I’ve carefully considered all the information provided. I may not comment on each point raised – and this isn’t intended as a discourtesy. But my decision will focus on the issues I consider to be key to this complaint. I’m sorry to hear that Mr A has been the victim of a GB. I recognise this would have been particularly upsetting to discover, especially as Mr A was involved in an accident during the period of cover. While I’m empathetic to the circumstances Mr A has found himself in, my role requires me to determine if Mulsanne has treated him fairly, taking into account the

-- 1 of 4 --

relevant law, regulatory rules, industry best practices as well as what I consider to be fair and reasonable in all the circumstances of the complaint. Having considered the case in detail, I think Mr A has been treated fairly, and so I don’t uphold this complaint. I’ll explain why. The scope of my decision Mr A has also complained about the way the policy administrator has handled his policy, including the recovery of the finance agreement used to pay his policy premium. I understand Mr A has complained to the policy administrator separately and has subsequently referred that complaint to this Service. As such, this decision will solely be in relation to Mulsanne’s actions. So, what I need to decide is whether Mulsanne was entitled to cancel the policy, and if so, whether it was fair to do so based on the circumstances of this case. The policy terms The starting point with any insurance policy is the policy terms as this sets out the basis of the agreement between the insurer and its policyholder. Under the terms of Mr A’s policy, Mulsanne has the right to cancel a policy with immediate effect if a policyholder, or anyone acting on their behalf, committed any element of fraud or deliberately misled Mulsanne, and it has the right to retain the premiums paid. It isn’t in dispute that Mr A’s policy was arranged by a GB, and they deliberately provided an incorrect date of birth (an increase in Mr A’s age by 10 years) in order to obtain cover. While I accept Mr A didn’t know that the GB deliberately provided incorrect information, the policy was arranged by the GB acting on his behalf, and insurers are generally entitled to rely on the information provided during the application process, even where it’s input by an intermediary rather than the consumer directly. So, under a strict application of the policy terms, Mulsanne had the right to cancel the policy. But while Mulsanne was contractually entitled to cancel the policy, I’ve gone on to consider whether exercising that right was fair and reasonable in the particular circumstances of this case. Was it fair for Mulsanne to cancel the policy? Had Mulsanne not cancelled the policy in line with the terms, I would have expected it to treat the discrepancy in Mr A’s details as a misrepresentation. The relevant law when considering a misrepresentation is The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). This requires consumers to take reasonable care not to make a misrepresentation when taking out a consumer insurance contract (a policy). The standard of care is that of a reasonable consumer. And if a consumer fails to do this, the insurer has certain remedies provided the misrepresentation is – what CIDRA describes as – a qualifying misrepresentation. For it to be a qualifying misrepresentation the insurer has to show it would have offered the policy on different terms or not at all if the consumer hadn’t made the misrepresentation. To be clear, Mulsanne didn’t treat this as a misrepresentation under CIDRA. But I’ve considered CIDRA when looking at what the alternative outcomes could have been, and to

-- 2 of 4 --

help assess whether the approach Mulsanne actually took was fair and reasonable in the circumstances. Although Mr A didn’t complete the proposal himself, the policy was arranged by the GB acting on his behalf. In these circumstances, insurers are generally entitled to rely on the information provided during the application process, regardless of whether it was input directly by the consumer or by an intermediary acting for them. CIDRA sets out a number of considerations for deciding whether the consumer failed to take reasonable care. And the remedy available to the insurer under CIDRA depends on whether the qualifying misrepresentation was deliberate or reckless, or careless. While Mr A took the policy out through a GB, the GB still had a duty to take reasonable care not to make a misrepresentation. In this case, the GB deliberately provided an incorrect date of birth to obtain a lower premium. I don’t consider that providing false information in this way meets the standard of reasonable care required under CIDRA. While Mr A wasn’t personally responsible for doing this, the misrepresentation was nonetheless made on his behalf during the application. And I don’t find that a reasonable consumer would have acted in the same way. So, it’s clear a misrepresentation took place, and this would typically be deemed a deliberate misrepresentation. Mulsanne has provided evidence showing the broker obtained several quotes using variations of Mr A’s details in order to achieve a lower premium. This evidence also shows that, when Mr A’s correct date of birth was used, cover on a similar basis to that ultimately purchased, would have been declined. Taking this into account, I’m satisfied it’s more likely than not that Mulsanne wouldn’t have offered cover at all if the correct information had been provided at the outset. Had Mulsanne treated Mr A’s misrepresentation as a deliberate qualifying misrepresentation, CIDRA says Mulsanne could have avoided the policy (treated it as though it never existed), retained the policy premiums, and decline to cover any claim under the policy. As Mr A was involved in an accident, this would mean Mulsanne would only cover the claim in line with its obligations under the Road Traffic Act 1988 (RTA), which would enable it to recover its costs from Mr A. Even if the misrepresentation were instead treated as careless, rather than deliberate, CIDRA states that where an insurer can show it wouldn’t have offered cover at all, it’s still entitled to avoid the policy and decline any claims. But the key difference is that the premium would usually be returned. The insurer could still seek to recover any costs incurred in settling a TP claim in line with the RTA. It follows that had Mulsanne treated the discrepancy in his date of birth as a careless misrepresentation, while this would mean Mulsanne would have to return Mr A’s premium in full, it could then still look to recover any outlay it incurred in settling a TP claim in line with its obligations under the RTA. Compared to either of these outcomes, Mulsanne’s decision to cancel the policy from the point of discovery, continue dealing with the TP claim, and not seek recovery of its outlay places Mr A in a more favourable position than it would have been entitled to adopt under CIDRA. While I appreciate Mr A will be disappointed that he hasn’t received a refund of his premium, the policy terms allow Mulsanne to retain premiums where a policy is cancelled for fraud or misrepresentation. I’ve also considered that Mulsanne has continued to deal with the TP claim and hasn’t sought to recover its costs from him. The terms allow Mulsanne to charge the full years premium in the event of a claim. So, in the circumstances of this case, and

-- 3 of 4 --

given Mulsanne has accepted and is dealing with a TP claim, I don’t find this to be unreasonable or disproportionate. Mulsanne has also agreed not to record the cancellation on insurance databases – so Mr A isn’t required to declare the policy cancellation when seeking out cover in the future. Given Mr A was the victim of a GB, I find this to be reasonable in the circumstances as this ensures Mr A isn’t at any detriment when applying for cover in the future. My final decision While I recognise Mr A will be disappointed, I don’t find that Mulsanne has treated Mr A unfairly. So, my final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A to accept or reject my decision before 22 May 2026. Oliver Collins Ombudsman

-- 4 of 4 --