New non-disclosure approach

New guidelines issued by the Association
of British Insurers (ABI) on the payment of critical illness,
income protection and life insurance claims where medical
information has not been disclosed have been widely welcomed by
insurers as a means of improving consumer confidence and providing
impetus to sales.

“The number of protection claims that are turned down will
fall,” predicted the ABI’s director general, Stephen
Haddrill.

The ABI’s guidelines cover three categories:

• Innocent. Applies in a situation in which a
  reasonable person would have considered that the information was
  not relevant to the insurer. Under these circumstances claims are
  to be paid in full;

• Negligent. Applies where the non-disclosure
  resulted from insufficient care and includes anything from an
  understandable oversight or an inadvertent mistake to serious
  negligence. Under this category a proportionate remedy applies to
  claims; and

• Deliberate. Applies where the non-disclosure
  was deliberate or without any care and on the balance of
  probabilities the customer knew, or must have known, that the
  information given was both incorrect and relevant to the insurer,
  or the customer acted without any care as to whether it was either
  correct or relevant to the insurer.

  “Essentially, we want to ensure that the customer is given the
  benefit of the doubt when it comes to judging whether to decline
  claims due to medical information not being disclosed to the
  insurer,” said Bernie Hickman, insurer Legal & General’s MD of
  protection and chair of the ABI committee that produced this
  guidance.