Insurance companies have today announced that they will pay more claims for Critical Illness, Income Protection and life insurance where medical information has not been disclosed, unless the customer deliberately withheld it. This important new commitment will lead to a further fall in the number of declined claims.

Where relevant information has not been provided, insurers will pay customers a fair sum, reflecting risk and premiums paid. In a small number of exceptional cases, premiums will be refunded if the insurer would not have taken on the policy if they had known the full facts.

This new commitment follows recent improvements in policy application forms and clarity of communication to customers. These are already leading to a fall in the number of declined claims for protection policies.

Stephen Haddrill, the ABI’s Director General, said:

“Customers want to know that their insurance claim will always be assessed fairly and paid without fuss. The industry wants customers to be able to take out insurance with confidence. Today insurers have signed up to ensuring both of these happen. The number of protection claims that are turned down will fall.”

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Notes

1.            Enquiries to:       

         Alan Leaman    020 7216 7440 (Mobile: 07957 482 330)

         Jonathan French   020 7216 7392 (Mobile: 07958 330 480)

         Malcolm Tarling    020 7216 7410 (Mobile: 07776 147 667)

         Erfan Hussain       020 7216 7411 (Mobile: 07712 841 184)

         Kelly Ostler        020 7216 7415 (Mobile: 07968 364 302)      

2.            The new ABI guidance, Non-Disclosure and Treating Customers Fairly: Claims For Long-Term Protection Insurance Products, is available by clicking on the link below.

3.            The guidance, drawn up in consultation with the Financial Ombudsman Service and ABI member companies, comes into immediate effect for new and existing protection insurance policies (typically life, critical illness and income protection insurance). Any claims in the pipeline will be dealt with under the new guidance.

4.            The guidance is the latest in a series of initiatives designed to improve protection insurance. The ABI published new guidance on improving the clarity of application forms in February 2006, clearer descriptions of the main conditions covered by critical illness insurance in April 2006, and new guidance on improving the clarity of telephone and online protection insurance applications in August 2007.

5.            The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

6.            An ISDN line is available for broadcasts.