The "diabolical" selling of protection back books needs to be regulated and restricted, with the new owners held accountable for the way the books are run, an industry expert says.
Advisers and providers have also been warned that the industry must modernise and address consumers correctly to flourish in the current market.
Making a keynote speech at the COVER Health and Protection Forum, Clive Waller, managing director of CWC Research, criticised the current way closed provider books are dealt with and called for regulators to act.
"The selling of books quite frankly is diabolical," he said.
"If you want to look at what happened when a lot of people sold of mortgage books its not a pretty story.
"I'm not suggesting selling protection books is as bad but if you sell on brand and then you sell the book there's something very wrong there and we need far tighter regulation on books being sold.
"Takeovers are unavoidable but, even then, if a company buys a book through that they should be held responsible for maintaining those claims properly," he added.
In a controversial speech that sought to raise the industry's attention to some of its persistent problems, Waller, who is also co-founder of the Income Protection Task Force, highlighted concerns that IFAs do not address their customer's primary need when recommending policies.
"IFAs do not regard claims payment as a selection criteria," he said. "That's been proved, it's research we've done again and again.
"The vast majority of IFAs look at service, rates and product features, but they do not look at claims as criteria for selection.
"Imagine you're a customer - it's the only thing a customer looks at and it's the only thing that does matter to a customer," he added.
Waller continued by lamenting the treatment of claimants, in particular those for critical illness, which he noted the industry typically does not support breast cancer or prostate cancer - "the two diseases we fear most" - unless it is sufficiently severe.
"You can have all the justification in the world but when someone has breast cancer and has to have the breast removed they think that's pretty damn critical - but this industry doesn't," he said.
"You may be right, but being right is no good - don't expect the consumer to like you for being right."
And he argued that, despite figures suggesting only a minority of protection sales are carried out online, this was negated by most people using aggregators as their first source of information before completing telephone advised sales.
However, Waller concluded there were reasons for optimism in the industry and if it could address new approaches to selling products the future could be bright.
"There's quite an opportunity here," he said. "How will people buy insurance tomorrow? From conducting research we decided that pick and mix was a way protection policies could be bought.
"We believe if people were to choose to buy their own product, paying for each bit they might well exclude stuff that they feel they could do without and I think anyone who denies that is extremely arrogant.
"Why is pick and mix PMI [acceptable] and IP not - at least think about it," he concluded.
