The Government's 2004 deadline for regulating long term care is unlikely to be reached, say critics
The regulation of long term care (LTC) products has been delayed and is now expected to be in force by 2004 at the very earliest, which could hamper product sales.
Speaking at the House of Lords, Lord Lipsey remained sceptical that even the 2004 deadline would be achieved. He instead suggested 2005 or even 2006 might be attainable and claimed the lack of regulation could be influencing the number of LTC policies being sold.
'The industry says it will not sell many such policies until they are regulated because old people will not have confidence in them. That is why the take-up has been quite small. So thousands more older people might lose all their assets, which they could have protected by taking out a long term care insurance policy, as a result of the Government's culpable failure to put in place regulation,' he said.
Chris Ellicott, technical manager at Age Concern Financial Partnerships, agreed: 'Lots of IFAs think that until long term care is regulated they don't need to get involved. Some IFAs could do business, but won't advise on it. A lack of regulation doesn't mean it is a bad product to use and IFAs could be missing out on business as a result. Given the recent fuss about endowments, you would think they would ensure it was regulated on time.'
In response to the delay, Lord McIntosh confirmed the Government's intention to fully regulate LTC, but said it would be in line with the regulation of general insurance and the European Union (EU) Insurance Mediation Directive.
He said: 'There are good reasons why we have not yet legislated to regulate it. We intend to dovetail the regulation of long term care with the implementation of the EU Insurance Mediation Directive.
'I am convinced implementing long term care insurance as part of the wider general insurance regime under the scope of the EU Insurance Mediation Directive will benefit consumers by introducing a seamless and comprehensive regulatory regime covering long term care insurance and other related insurance products.'
However, given that the LTC industry has remained unregulated and will continue to do so for the impending years, Owain Wright, head of The Care Funding Bureau, believes many advisers are not adequately informed to provide advice on LTC.
'It is a shame European harmonisation seems to take preference over protecting the financial interests of our elderly and infirm. This is the most complicated advice sector in our industry. The products are relatively simple, but it is unquestionable that both products and advice need some form of supervision and control. The Government promised to introduce regulation of LTC. That was two years ago and now we have to wait a further two years. It is not good enough,' he said.
