Well after emails and phone calls with no clear answers today a letter dated January 5th arrived stating the claim has been settled as per prior correspondence and that the "file has now been passed to our Recoveries Team who will be writing to you seeking recovery of the above mentioned payments" was received. An email was also replied to stating they had sent no letters prior.

So it does look like a solicitor will need to be involved soon as neither the insured or his parents would have the ability to repay the amount paid out.