ABI publishes revised guidelines

The Association of British Insurers (ABI) has published new guidelines to assist providers offering private medical insurance (PMI) products.

The Statement of Best Practice for the selling of private medical insurance cover, is designed to take account of Financial Services Authority (FSA) regulation, which is effective from 14 January 2005. It also aims to ensure customers experience a seamless transition into regulation. It replaces all previous statements including those issued by the General Insurance Standards Council.

Some of the recommendations made in the revised statement go beyond the requirements set out by the FSA, with recommendations including placing greater emphasis on client documentation.

The statement lists no less than four separate guides to be issued to customers covering subjects from premium increases and moratoriums, to chronic conditions and agreed common definitions. The new guidance also makes customer comprehension a top priority. ABI members will be obliged to give 'a full and clear explanation' of any technical exclusions or restrictions that may apply.

In the event that a customer transfers from one provider to another 'the customer should be given sufficient information concerning the new product to enable them to compare the two products and make an informed decision whether to move,' it said.

The statement is mandatory for members of the ABI and is recommended for members of the Association of Medical Expense Insurers, who are non-ABI members.

"The purpose of this new statement is to act as a minor re-wording of the old statement," said Vicki Bolton, health policy advisor at the ABI. "It is not designed to change anything. Customers and businesses should see the same thing happen on 13 January as on 15 January."

Advisers have generally reacted positively to the new guidelines. "I think the statement is an excellent document for clarifying some of the main areas of misunderstanding. The statement also helps tremendously by using 'what if' scenarios," said Bhupinder Anand, managing director of Anand Associates.

The Statement of Best Practice was published as the ABI announced it has extended an invitation to Stephen Walker, chairman of the Association of Medical Insurance Intermediaries, to join its PMI board. In accepting the invitation Walker said: "I appreciate the opportunity to work with the panel in what is likely to be a rapidly changing market."