WPA adds moratorium underwriting

WPA has introduced moratorium underwriting on its individual private medical insurance (PMI) plans for clients who fit certain criteria.

For the last 13 years clients have only been accepted on an FMU basis, but following significant broker feedback it has made the change to extend its reach to new customers.

The provider said it still favoured a full medical underwriting (FMU) approach but recognised that a moratorium would be preferred by some clients.

To qualify, moratorium applicants must not have been diagnosed with heart disease, stroke, diabetes, cancer or be undergoing regular screening for cancer nor had a surgical procedure or arthroscopy for a joint or back condition.

Applicants over 18 must also have a body mass index of between 19 and 32.

Moratorium coverage excludes pre-existing conditions experienced over the previous five years until no symptoms, treatment, medication or advice have been required for two years.

The insurer has decided to maintain premiums and broker commissions the same for both options to ensure that the most suitable one is chosen for the client.

WPA also announced a 2012 discount offer for new customers.

Those joining this year will receive a 20% premium discount, followed by a 12% discount in 2013 to aid retention and avoid a steep increase in second year premiums.

Mark Southern, general manager of sales and marketing for private clients at WPA, told COVER the criteria have been designed to direct the customer to the most appropriate terms, manage risk and protect existing customers.

"I still prefer FMU but PMI is all about choice, so now we have choice of underwriting," he said.

"It's a controlled moratorium to give the customer a choice between FMU and moratorium and also gives intermediaries simpler joining terms.

"Brokers were saying that they needed moratorium options if they were going to match potential WPA customers to products.

"So this overcomes the biggest objection from intermediaries and we've done it in a way we feel comfortable doing it," he added.

Charlie MacEwan, corporate communications director for WPA, continued: "The advantage of FMU is the customer knows what they are covered for from day one and we still think majority of people will be fully underwritten.

"The moratorium will evolve, we're an insurer which manages risks, so we may change this following feedback but we are trying to get just the right balance," he added.

The insurer is also holding a series of courses around the country where it is seeking to hear intermediary feedback.