After extensive consultation and consumer research the ABI is set to publish an updated Statement of Best Practice for Critical Illness Insurance.  The updated Statement sets out to improve clarity and understanding of the Total Permanent Disability (TPD) cover in Critical Illness insurance policies. 

The insurance industry has developed a set of standard definitions and more descriptive headings which together will support an education plan to improve understanding and reduce the number of claims declined.

Nick Kirwan, the ABI’s Assistant Director, Health and Protection, said:

“We have explored a number of ways to help make claiming TPD easier for customers, which did include changing the name of the benefit. However, customer research did not strongly support this idea. After careful consideration we have now agreed standard definitions, training packs for advisers, an online hub of information and much clearer steps for customers which we believe will make the process easier and increase successful valid claims.

“Throughout we have taken a very inclusive approach to addressing this complex issue and we have had feedback from advisers, consumers, and a wide range of other stakeholders including regulators and the Financial Ombudsman Service.”

-       The new Statement will be issued in early 2011.

-       The heading Total Permanent Disability will remain but will be extended to make the scope of the cover much clearer. This means that the education programme can apply to both new and existing policies to make the most difference in helping to reduce the proportion of declined claims.

-       ABI members will be required to implement the policy when making updates to their CI policies.

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Notes

1.        Enquiries to:

Liz Forster                020 7216 7444 (Mobile: 07717 578 586)

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

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

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

2.    Customers can claim under TPD if they have a life changing disability that means that they cannot perform certain tasks outlined in their policy ever again.

3.    While the majority of CI insurance claims are paid promptly as they are based on a straightforward diagnosis, this is not always the case with TPD.  Although TPD accounts for just 3% of claims, 55% of these are declined because consumers do not have a clear understanding about when they can make a claim. The insurance industry has developed a standard set of definitions, more descriptive headings, and customer education to improve understanding and reduce the number of claims declined.

4.    The ABI is the voice of the UK’s insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market.

The ABI’s role is to:

-       Be the voice of the UK insurance industry, leading debate and speaking up for insurers.

-       Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.

-       Advocate high standards of customer service within the industry and provide useful information to the public about insurance.

-       Promote the benefits of insurance to the government, regulators, policy makers and the public.

The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 24% of the UK’s net worth and contributing the fourth highest corporation tax of any sector. Employing over 275,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with a fifth of its net premium income coming from overseas business.

Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £155 million in benefits to pensioners and long-term savers as well as £58 million in general insurance claims.

5.        An ISDN line is available for broadcasts.

6.        More news and information from the ABI is available on our web site, www.abi.org.uk.