Abi announces new rules on payouts for critical illness insurance

client claiming on their critical illness insurance, income protection and life insurance policies are set to benefit from pioneering new rules which state that insurance companies will now pay out where checkup information has not been disclosed, providing the client has not intentionally withheld it.

The proclamation, made by the ABI on behalf of its members, will mean a fall in the figure of disputed or refused claims and follows a series of recent shake-ups, such as alteration to application forms and improved communications betwixt insurance firms and claimants, which have already contributed to a fall in the figure of dismissed claims.

Commenting on the alteration, Stephen Haddrill, Director full general of the ABI, said:

"client want to know that their insurance claim will ever be assessed fairly and paid without fuss. The industry wants client to be able to take out insurance with assurance. Today insurers have signed up to ensuring both of these happen. The figure of protection claims that are turned down will fall."

In the event of a client failing to provide relevant checkup information, insurers will pay out a fair sum which will be reflective of the risk and the insurance premium already paid. Nevertheless, under the new rules, full insurance premium refunds will be given if the insurance company decides that the policy would not have been taken on had they known the full facts, but it is idea this is probably to be for a very small figure of exceptional cases.

Louise Cuming, Head of Protection at moneysupermarket.com, remark:

"This proclamation – coupled with the Financial Services Authority's new Insurance Conduct of concern Sourcebook (ICOBS), which aims to improve selling pattern for protection products – will have a profound, positive consequence on the protection industry. United Kingdom is an underinsured nation, so improving customer assurance and portion them understand policies is very important."

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