Insurance cover could become fairer

New regulations and changes to the law could result in greater fairness for consumers that have various types of health insurance cover, as it means that there will be less of a chance of the insurance company being able to deny the claim.

In the past a number of insurance companies have been slated for denying claims from policyholders because of information that was or was not given at the time that the policy was taken out, leaving the policyholder with no way to claim on his or her policy.

Plans have been proposed by the Law Commission, which looks at the way that laws are applied in cases such as these, and if everything goes through successfully it means that insurance companies will not be able to refuse to payout on a claim because of lack of information provided when the policy was taken out by the claimant. Life and critical illness insurance policyholders may benefit the most, as the level of denied claims in these areas is quite high.

One spokesman from the Law Commission stated: ‘We have sought to bring insurance law up-to-date to reflect the reasonable expectations of insurers, policyholders and intermediaries. Our overriding objective has been to achieve fairness between both parties to an insurance contract, while recognising different levels of information about the insured risk and different bargaining strengths.’

However, insurance companies plan to fight against the changes. According to an official from the Association of British Insurers: ‘In effect, our members are operating to these standards anyway and are not forcing claimants to go to the Ombudsman needlessly. Many insurers have already made clear that they will not decline critical illness or life claims when the information that was not disclosed has nothing to do with the final claim.’

Tom Smith
26th July 2007

Tags: policy, changes, health, companies, holders, consumer

Government to crackdown on insurance cover from travel agents

According to a recent report the government in the UK plans to crackdown on travel insurance cover purchased from travel agents in a bid to provide consumers with higher levels of protection when they purchase this insurance.

The government has announced plans to regulate the sector, and this means that travellers could look forward to increased levels of protection when they purchase their travel cover from travel agents.

The government has announced that the Financial Services Authority will now be regulating travel insurance sold alongside holidays by travel agents. Travel agents that plan to sell this type of insurance with holidays will therefore have to make sure that it is designed to fit the needs of customers.

Customers will have to be treated fairly in line with Financial Services Authority regulations when buying these policies, and in the even that the customer of dissatisfied with an aspect of the sale of the policy he or she can go through the Financial Ombudsman Service.

Ed Balls, economic secretary to the Treasury, stated: ‘Evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at explaining the key features and exclusions of the product and guiding the customer through the sales process.’

The crackdown results from complaints from consumers groups with regards to unsuitable and expensive policies being sold to customers in the past – a problem that this move will help to reduce. The new regulations are set to come into force in 2009, although many officials from the travel agents industry are not happy about the move.

The travel agency industry had asked for the opportunity to make changes without these new regulations being put in place, but were not granted this opportunity.

Tom Smith
4th July 2007

Tags: changes, cost, finance, holiday, options, Insurance