After more than 12 months of dispute between the British Medical Association (BMA) and the Associati...
After more than 12 months of dispute between the British Medical Association (BMA) and the Association of British Insurers (ABI), the two organisations have finally agreed the fee GPs can reasonably charge insurance companies for completing medical reports for patients applying for cover.
Insurers will now have to pay a fee of £60 per GP report, almost double the £31 fee which was paid before the agreement broke down. This is clearly a big hike, and a cost insurers will most likely continue to bear ' however much they begrudge it. But while insurers may be smiling through gritted teeth, it does spell good news for both IFAs and their clients.
Since the initial agreement broke down, clients applying for life, critical illness and income protection benefits have had to put up with worsening levels of service.
With no agreed fee in place the underwriting process was delayed with doctors and underwriters being forced to agree fees on a case-by-case basis, often depending on the time the doctor was being given to prepare the document.
This naturally extended the underwriting process with one insurer reporting that GP reports now take, on average, 30 days to come in, compared to 22 days a year ago.
Clearly this is by no means the fault of the insurer, but it will still be perceived as poor customer service by the consumer, anxious to get their cover in place.
Hopefully, now that an agreement has been made we can look forward to a faster underwriting process. However, perhaps the biggest benefit of this increase to GP fees is less obvious.
Financial services across the board have been revolutionised by technology ' different products can be sourced electronically, term assurance can now be bought online (if the application is clean) while some mortgage lenders will deliver agreements in principles within 60 seconds and even accept electronic applications.
Underwriting however still seems to be trapped in the dark ages by comparison. Speaking at the COVER Forum in Manchester, Mark Preston from Scottish Equitable predicted that within the next two to three years GPs will be able to transfer patients' medical records to insurance companies electronically (see news story on page 5).
Other insurers think while this process will eventually go electronic, a three-year time frame is a little optimistic.
But improvements to the underwriting process do not rely on technology. The cost of GP fees could prompt insurers to review their own processes. In many cases insurers would request GP reports just to validate information provided in the application form, so any increase in costs could spur insurers to reduce the number of GP reports they demand from applicants reporting no symptoms ' again good news for advisers and their clients.
Insurers need to haul their underwriting proposition into the 21st century. While a handful are making significant improvements and the dialogue between insurers and the NHS has begun, the industry as a whole still has a long way to go ' but perhaps this increase to GP fees could act as the catalyst for change.
Rachel Williams, editor
