The Association of British Insurers has said it will look into Swiss Re's new findings that the cancer definition should be termed differently. Bearing in mind there has been a working group discussing the issues of redefining the critical illness definitions, with the changes coming into effect in April, is it reasonable to take these new findings into account or is it too late?
Market viewsAndy Couchman, Bank House CommunicationsIt is clearly embarrassing for all concerned that this was not spotted during the consultation period. That said, you have to park that issue and look instead at what is best for the industry, especially the customer, and look at the practical effects of making a change now.
If it is in the customer's best long-term interest to change the cancer definition then that is what the Association of British Insurers (ABI) should do. This is not an easy issue though, because, what is in the customer's best long-term interest and who decides that?
If it was my decision, I would start with determining what the full facts are first - which is what the ABI is doing - then undertake a cost/benefit analysis and, if the decision is to change the definition, look at the practical aspects.
Swiss Re has some of the best brains in the business and it would not have raised this matter lightly, so my expectation is that the definition will be changed sooner or later.
My punt would be that scrapping the April implementation date, re-consulting on the change and then introducing it from say October, would be the way forward. But that really does depend on all concerned being pretty convinced it is the right and only way to go.
Changing now is better than changing later and while I do sympathise with insurers who have already changed their definitions, that is a business risk you take.Paul Cowman, Prudential
The Association of British Insurers (ABI) is currently looking into the definitions of two cancers that Swiss Re says should be termed differently. At this stage we do not know what the findings of the ABI's investigation will be - and while it is a shame this has occurred so late on in the process, it is important for the industry as a whole that the definitions are appropriate and can be implemented.
If the definitions change there will be a cost implication for many insurers who have already made changes to their literature, but while it is unfortunate, it is far more important that we reach the best position possible when it comes to definitions, and that insurers are supportive of the need to do this.
What this does highlight is the constantly evolving nature of the medical industry. As long as there are medical advances, critical illness (CI) is subject to some uncertainty and CI definitions will be subject to challenge and change.
As far as Prudential is concerned, whether the ABI chooses to exclude these conditions or not, the Pru's new Flexible Protection Plan would cover both these cancers if they became malignant.
Richard Verdin, Direct Life & Pension Services
The answer to this is simple. If Swiss Re is correct, and I have heard no one say they are not, then the changes they have put forward should be properly considered and adopted if appropriate.
April is still months away and was around seven months away when Swiss Re first announced its findings. As for the timing, I think everyone accepts that Swiss Re's proposed changes are based on new information, and that it presented this new information at the earliest opportunity, following proper validation.
As an industry we should get the 'new' definitions as right as we can, especially if it leads to less ambiguity and greater clarity as claimed. Clearly, this situation has lead to some irritation among early adopters of the 'new' definitions, however, that should not mean full consideration should not be given to Swiss Re's findings.
Nick Kirwan, the ABI Protection Committee
Since the ABI published the revised Statement of Best Practice for CI cover earlier this year, new medical evidence has been brought to the attention of the ABI Protection Committee concerning the standard cancer definition used in CI policies. Earlier medical opinion suggested that two very rare myeloproliferative disorders (essential polycythaemia and polycythaemia rubra vera) were pre-malignant conditions and the cancer definition was drafted so they would only be covered if they became malignant. However, the new medical evidence suggests that these conditions are now generally always considered to be malignant.
This raises the question about whether the cancer definition may need to change and/or whether some other action would be appropriate. Obviously, the timing of the new information is a little unfortunate coming so soon after the ABI published the revised cancer definition. On the other hand, medical opinion and advances happen all the time and we now have to consider the best way forward.
To do this, we need to ensure that we understand the medical evidence - including the incidence of the conditions, the prognosis and the effect on people's lifestyle and life expectancy. We also need to consider the legal implications of the wordings and ensure that the interests of consumers are protected. This all needs to go to the ABI Protection Committee to reach a decision to ensure that the cover is appropriate and that the definition wording does what we intend it to do.
We have not yet reached that point and, as soon as we do, we will be letting members know the outcome. Until then, it is worth reminding ourselves that these are very rare conditions that, for malignant cases, would be covered by the new cancer definition as it currently stands.
