The Association of British Insurers (ABI) has launched a consultation on possible changes to its “Statement of Best Practice for Critical Illness Insurance”, based on proposals developed by its Critical Illness Working Party.
The Association’s bulletin said any changes would be “designed to improve choice and affordability for the consumer, ensure the continuing availability of this type of insurance and improve the quality and clarity of information to consumers about the product itself and the precise levels of cover which are available with it.”
The ABI is inviting views from consumer groups, the FSA and Ombudsman, financial advisers and medical experts, as well as the insurance industry.
The consultation covers three main areas, as follows:
— improving clarity by introducing better information so that consumers will see what is covered and when a claim is likely to be met;
— helping to make the product sustainable and more affordable by ensuring that the illness definitions take account of future medical advances;
— giving companies the option of offering two levels of cover for cancer to make policies more affordable and increase choice.
Richard Walsh, the ABI’s Head of Health Insurance, commented: “This is an important step forward for critical illness insurance. It builds on common definitions established through the original OFT review, whilst allowing product innovation and improving consumer choice.”
Nick Kirwan, Chairman of the ABI’s Critical Illness Working Party, added: “Critical illness insurance helps people protect themselves and their families from the potentially devastating financial consequences of critical illness. These proposals will bring greater clarity to consumers about how the product works and exactly what it does and doesn’t cover. They will also help ensure that this type of cover continues to be available at an affordable price. Critical illness insurance now covers around 12 million adults and children in the UK and has already paid out over 1.6 billion pounds [$2.9 billion] in claims to people who are critically ill.”
The ABI indicated, however, that “existing critical illness insurance policies will not be affected by any changes to the ABI Statement of Best Practice that may occur as a result of this consultation.”
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