ABI hopes the revisiting of best practice definitions will not cause uproar
The Association of British Insurers (ABI) will once again begin to look at the critical illness (CI) definitions for best practice this month.
Last time it was reviewed, it caused widespread upheaval due to the amount of changes that were needed. However, this time, Nick Kirwan, assistant director, health and protection at the ABI, is expecting a smoother ride with fewer changes: "I am encouraged that at the moment I do not have a great issues log. It was hoped that the definitions from last time would be enduring."
The ABI will send out a circular in the next month to all member providers to ask what changes they would like to see in the definitions.
In addition to looking at member requests, Kirwan said one focus would be on total permanent disability. "This should not be treated separately from CI. It will be one of the important points of the review," he added that, following a request, it would also look at the terminal illness definition, which he said needed clarity.
Roger Edwards, product director at Bright Grey, said he expected the next set of changes to be "relatively" limited because it was so soon after the last set. "It would not send a good message if they changed again so soon," he added.
Edwards thought there were two main areas of debate. The first was, following the ABI's standardisation of 20 illness definitions and the addition of four more, companies have continued to add more of their own definitions. He said: "There are now as many illness definitions that have not been standardised as those that have."
The second area was that once the definitions had been set, firms were given leeway to leave out some clauses - the "ABI+ definitions". This was to compete against rival providers but Edwards said it was important companies did not begin to cause confusion.
In addition, the ABI has caused controversy among smaller providers by appointing chairmen to two new committees that focus on development and strategy in the protection market rather than allowing members to decide the chairmen.
Bernie Hickman protection director at Legal & General, chairs the development committee and Clive Bolton, director of marketing, strategic pricing and annuities at Norwich Union, chairs the strategy committee.
However, Jonathan French, spokesperson for the ABI, said it was standard practice for the ABI to appoint the chairmen and this was always done in full consultation with its members. "If companies take issue with us doing this, then they should talk to the ABI directly," he added.
