Brokers slam Defaqto’s ‘highly dangerous’ PMI ratings

Medical insurance brokers have branded Defacto’s new private medical insurance (PMI) star ratings as ‘highly dangerous and not in the best interest of customers’.

They also said some of the rankings left them bemused and did not make sense.

As COVER reported, the new ratings are Defaqto's first foray into the PMI sector and were released earlier this week alongside its usual protection product analysis.

And while the analyst's protection ratings are not immune to criticism, it is usually from insurers rather than advisers.

However, having studied the new star ratings results, the Association of Medical Insurance Intermediaries (Amii) has raised significant concerns with the process.

Andrew Tripp, chairman of Amii, said many of the rankings had left members confused and would not be suitable for consumers.

"Our members, all of whom are specialist independent healthcare intermediaries with considerable expertise in PMI, are bemused by Defaqto's ranking of PMI products," he said.

"For example, we do not understand how a budget plan with little out-patient cover can be given the same 3 stars as other full out-patient products, it doesn't make sense.

"PMI is an extremely complex product and really does need specialist advice so that the product bought really is suitable and appropriate to an individual's personal circumstances and wishes.

"Type of cover, fully comprehensive v policies with exclusions, cover for cancer treatment, levels of excess, pre-existing conditions, hospital choice are just a few of the factors that need consideration.

He concluded by warning that Defaqto's decision to enter the market was not something it approved of.

"Introducing simple star ratings to PMI products is highly dangerous and not in the best interests of consumers," he added.