“While tax incentives are always nice to have, the reality is they are unlikely to lead to a significant shift in behavior. If the product or service is right at the right price, employers will buy irrespective of tax incentives,” he adds.
New FCA rules for general & health insurance
Have you heard of policy statement (PS 16/21) published in August by the FCA? I suspect not, but it has been met with a certain degree of incredulity by medical insurance intermediaries in recent weeks.
The new rules, which apply to individual clients and not groups, mean that general and health insurance intermediaries will soon have to disclose last year’s premium at each renewal. This is already done as standard in the health insurance market at least and therefore not an issue.
The thing that is getting everyone’s backs up is that the rules will also make it mandatory for insurers and intermediaries to also encourage clients to shop around to find a better deal than the one being recommended to them.
A prescribed statement to that effect will need to be included in documentation after the customer has renewed four consecutive times through the same channel.
Brian Walters, principal of Cheltenham-based medical insurance brokers Regency Health, said that the prescribed statement – ‘You have been with us for a number of years. You may be able to get the insurance cover you want at a better price if you shop around’ – could undermine the role of intermediaries.
He adds: “An intermediary's renewal letter may state in one paragraph that they recommend renewal to secure ongoing cover for pre-existing conditions and then encourage the client to shop around in the next.
"Absurdly, the regulator is asking us to undermine our own advice, which is likely to confuse clients.
“There are other grey areas. For example, the FCA states that the four consecutive renewal rule includes 'renewals where the intermediary changes the insurer behind the policy but the features and exclusions of the policy are so similar to the previous one that from the consumer's perspective they have renewed their policy.' This is highly subjective and frankly unhelpful.
“If a client moves from Bupa to Axa PPP, say, on a similar level of cover, it should be clear to the client that they had not renewed their policy. The question is whether this would be clear to the FCA.”
Trade body the Association of Medical Insurance Intermediaries (AMII) is currently in dialogue with the regulator. AMII chairman Stuart Scullion comments: “It is imperative that any changes to legislation impact positively for the consumer, having taken into account all considerations and recognising the very significant nature of health insurance. It is not appropriate to consider our market in the same vein as household and motor insurance.”
