Legal and General Assurance Society Limited · DRN-6105064

The complaint Mr C has complained to Legal and General Assurance Society Limited (‘L&G’) about its decision to reduce his enhanced annuity more than a year after it started. Mr C is being assisted with his complaint by his independent financial adviser (‘IFA’). What happened Mr C completed an ‘Enhanced Pension Annuity Quotation Request Form’ in May 2024. This form was sent to a number of annuity providers for quotations. On this quotation application form Mr C disclosed that he had two medical conditions, one of those being bladder cancer, which was diagnosed in 2022. The application also asked if the grading of the tumour was known, to which Mr C answered “yes” and in a box below this question he confirmed “early stages”. There was a further question below which read: “TYPE OF CANCER, STAGE, GRADE, AND TREATMENT RECEIVED. Please tick the box that most closely describes the nature of the tumour ☐ Carcinoma ‑in ‑situ (stage 0, Tis, Ta) ☒ Only local tumour growth ☐ Tumour invaded adjacent lymph nodes ☐ Tumour invaded distant lymph nodes If yes, please advise number of nodes affected and location ☐ Tumour spread to distant organs (distant metastases) if so, where” Mr C marked the box indicating “Only local tumour growth”. After receiving the quotations back, Mr C applied for an enhanced annuity, through his IFA, with L&G. Mr C’s enhanced annuity was set up with a start date of 28 June 2024. The policy document confirmed that Mr C would receive £974.35 a month in arrears. L&G requested a medical report from Mr C’s doctor in October 2024. This was completed on 30 October 2024. In July 2025, L&G notified Mr C’s IFA that it would be reducing his income. L&G said this was because the medical information provided was different to the report from the doctor. In relation to the bladder cancer the doctor had confirmed Mr C had a non-invasive form of bladder cancer. L&G said this differed from the invasive form Mr C had originally disclosed on the application. As a result, L&G said it needed to adjust Mr C’s income. Mr C’s IFA went back to L&G to confirm that it had been unable to find where Mr C confirmed that his cancer

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was invasive: in the only application form he completed he indicated that there was “Only local tumour growth”. L&G wrote back to Mr C’s financial adviser and explained the following: “The customer did not specifically say invasive cancer however they described the nature of the tumour as "only local tumour growth", this suggests a muscle-invasive cancer. The GP has confirmed the cancer staging as "Ta", this is a stage of non- muscle-invasive cancer. Given this, a more appropriate disclosure for the nature of the tumour would have been "carcinoma-in-situ (Stage 0, Tis, Ta)".” I understand L&G wrote to Mr C in August 2025 to explain the position to him. Mr C’s IFA complained to L&G on his behalf in August 2025. In summary they complained that: • the annuity had been re-keyed and reduced approximately a year after its start date, due to a reported medical discrepancy. • They had twice tried to query the source of this discrepancy with the telephony team but were given contradictory answers. It had now been explained that a final explanation will have to come from underwriting but there is no timeframe to receive this. This is unsatisfactory, given that the reduced income will be paid on 28 August 2025 and will have a significant impact on Mr C. • Mr C is vulnerable and this formed part of his suitability for an enhanced annuity in the first place. • Mr C would have reasonably assumed that the terms of the annuity were final as, to our knowledge, he completed the application in good faith. L&G issued its final response to the complaint on 1 September 2025. It confirmed it wasn’t upholding the complaint. Mr C, with assistance from his IFA, referred his complaint to this Service. One of our Investigators reviewed the complaint but they didn’t think L&G had treated Mr C unfairly so they didn’t uphold the complaint. Mr C didn’t accept the Investigator’s findings so the matter has been passed to me to reach a final 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. My role is to consider the evidence presented by Mr C and L&G in order to reach an independent, fair and reasonable decision based on the facts of the case. In deciding what’s fair and reasonable, I must consider the relevant law, regulation and best industry practice. And, having done so, I’m not upholding Mr C’s complaint and it’s largely for the same reasons that our Investigator has set out - I’ll explain why below. When L&G provided Mr C with an annuity quote, the rate it offered was based on the information Mr C had provided on his “Enhanced Pension Annuity Quotation Request” form. At the top of this form, the ‘Important notes’ sections stated: “Please describe as much information about your health as possible before signing this form. All questions asked are relevant, and by providing full and accurate

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information you will allow an insurer to provide as accurate a quotation as possible. The amount of your annuity income will be based on the medical information supplied. However an insurer may also seek to obtain independent verification of this information from your doctor. If it is subsequently found that the questions were not answered accurately and with reasonable care, then that could result in your income being reduced or your policy being cancelled” The declaration and consent section on the above mentioned form, that Mr C signed, explained that L&G may obtain medical information. The declaration also stated: “I/We declare that the information and statements provided above are true and I/we have taken reasonable care to ensure that my/our answers to the questions asked are correct. I/We understand that if any information provided by me/us is subsequently found to be inaccurate the policy may be amended or cancelled in accordance with the Consumer Insurance (Disclosure and Representations) Act 2012. I understand that this may mean the benefits payable to me/us are reduced and in some instances the policy may be cancelled” Mr C also completed an L&G pension annuity application form. In the “Notes for the member about the application” section, point 4 stated: “4. Information you should note: You need to make sure any medical information you give us is both accurate and complete so that we can pay you the maximum level of income you're entitled to. Once your income starts we may request additional medical information to ensure that you are receiving the correct annuity income. These requests may include one or more of the following: a report from your doctor, a short medical screening with a nurse or a simple saliva test (to confirm smoking status – if applicable). If this additional medical information differs significantly from that given to us previously, we may increase or decrease your payments in line with this, to ensure you are paid the correct amount.” I’ve also been provided with the “Underwriting Annuities” guide, for financial advisers. On page 33, under the “Risks” section, it explains that: “Once their annuity is in payment your client can’t change any of their payment options, even if their circumstances change The pension income we offer is based on the information your client provides when they apply We may request a report from your client’s doctor after their income starts, to check any medical or lifestyle information provided [bold is my emphasis]. If we find the report does not support the information they’ve given us and the income we’re paying your client is too high, we may reduce what we’re paying your client but their income will not reduce any lower than our standard annuity rate. We’ll then take back any overpayments from your client” So I think the above explains that L&G may request medical information and may amend the annuity if any of the medical information provided is found to be inaccurate. Given the above, I think L&G is entitled to remove any enhancement on an annuity if it receives medical information that contradicts the information in the application form, which

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it’s based its enhanced annuity on. Mr C’s IFA says they have never known this to happen after an annuity is in payment. However, it’s not uncommon for a firm to carryout audits or sampling of its applications after annuities have been established. And the above does explain that the medical information may be requested after the annuity starts. L&G has explained why it reduced Mr C’s annuity. And I don’t consider its reasons for this to be unfair. When asked on the application to confirm which box “most closely describes the nature of the tumour”, Mr C ticked the box indicating “only local tumour growth”. But the report from Mr C’s doctor confirmed - on page 7, under question 4 - that the cancer stage was "Ta". There was a different box to tick on the Enhanced Pension Annuity Quotation Request Form’ for this stage. In terms of bladder cancer, “Ta” means the cancer is just in the innermost layer of the bladder lining. Whereas the box Mr C ticked suggests the cancer, while still in the bladder, has started to grow into the connective tissue or muscle. And had the application form been completed confirming the correct stage initially, Mr C would not have been offered the enhanced annuity. Mr C’s IFA has said that the classification of Mr C’s cancer and the application form are both ambiguous. And that L&G’s own publicly available underwriting criteria describes cancer as ‘Stage 1’ to ‘Stage 4’ which is, in the IFA’s view, how a client would be expected to understand a diagnosis. However, when disclosing the stage of the cancer, there were 5 possible options that could have been selected. And one of the boxes included the stage ‘Ta’. Which Mr C’s doctor has since confirmed as the stage of Mr C’s cancer. So I don’t think it was ambiguous. The application form highlighted the importance of the medical information being accurate. So if Mr C (or his IFA) was unsure of how to answer the question or didn’t know the stage of his diagnosis, this was information that should have been confirmed prior to completing the application. I’m conscious that L&G wasn’t providing advice to Mr C. It simply provided a quotation based on the medical information it had been provided with. And Mr C’s application confirmed that he had received advice from his IFA. So I think L&G was entitled to rely on the information it was provided with. Mr C’s IFA has said that Mr C has no way to restore his income or look for a more suitable provider for his needs. And I do appreciate the impact this has and will continue to have on Mr C. But I don’t consider that L&G was at fault. So in my view, it’s not required to honour the enhanced annuity, nor is it required to unwind the contract; it was entitled to request the medical information after the annuity had been set up. And its terms confirmed that the income would reduce if the medical information didn’t support what had initially been disclosed.

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I appreciate Mr C didn’t knowingly make an error in his application, and likely arranged his expenditure based on an annuity he wasn’t expecting to reduce in the way it has. And I accept that L&G took a long time to request and then review the medical information it received. I can imagine it was shocking for Mr C to hear his income would be reducing after having been in payment for a year. But the fact that it took so long, also led to Mr C being paid the extra income for as long as he was. And I’m pleased that L&G recognise Mr C didn’t intentionally mislead it when he completed his medical information. So it has not sought to recover the past overpayments – amounting to £848.51 gross. I think this is fair in the circumstances. I am sorry to disappoint Mr C but I’m not upholding his complaint as I don’t think L&G has treated him unfairly by reducing his annuity. My final decision For the reasons explained, I’m not upholding this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 16 April 2026. Lorna Goulding Ombudsman

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