Non-contestability could up fraud

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Non-contestability is likely to increase fraud instead of decreasing it, it was admitted at the RGA ...

Non-contestability is likely to increase fraud instead of decreasing it, it was admitted at the RGA conference back in December last year.

Greig Woodring, global president at RGA, revealed that, while there was no proof to back up claims, there was a feeling in the industry that non-contestability increased fraud rather than diminishedit as several industry experts have argued.

Delegates at the conference also suggested electronic GP reports are unlikely to ever be a hit with the insurance industry due to quibbles surrounding the issue of data protection.

Steve Casey, product manager at Bupa, said: "In this day and age this should be easy to do and I find it disappointing that we have got no further than where we are."

He added that he thought the Association of British Insurers should be in consultation with the British Medical Association to see if they could make it happen.

Jason Hurley, head of sales and marketing at RGA UK, discussed the use of technology and the feasibility of such reports. However, delegates remained sceptical of such an idea in the UK.

Woodring also revealed that in contrast to the UK, in the US there was no traction in the critical illness market. He claimed that there is no success in the group or individual market owing to the strict enforcement of regulation.

He said a growing American trend was for a small group of merchant banks to buy out people's policies if they are likely to die quickly.

There is no separate case for fraud in the US so after two years the insurer has to pay out. It is not contestable.

Thomas Perry, managing director at RGA UK, added that the US had been living with non-contestability since the 19th century.

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