Monday, 17th October 2016

The Association of Medical Insurers and Intermediaries (AMII) has shared the ‘significant concerns’ of its members over regulatory changes to general insurance renewals at a ‘productive’ meeting with the Financial Conduct Authority (FCA).

AMII Chairman Stuart Scullion met with the FCA to discuss the recent policy statement on general insurance renewals (PS16/21: Increasing transparency and engagement at renewal in general insurance markets), following numerous expressions of concern among AMII members and the wider intermediary audience.

Stuart said: “This regulatory change has prompted more response from AMII members than any other issue in the five years since I joined the executive committee.

“AMII members and healthcare intermediaries generally are concerned we are being bundled together with home and motor insurance under a ‘general insurance’ banner without due consultation and consideration of the very specific characteristics which apply in the health sector - not least pre-existing conditions and underwriting.

“Of the 113 respondents to the Consultation Paper CP 15/41 - which led to Policy Statement 16/21 - there were no specialist healthcare intermediaries consulted. While we do recognise the FCA did consult with two intermediaries who offer healthcare services many of our members felt this was insufficient.

“Our meeting with the regulator was to reinforce that point but we discussed a number of aspects in some detail as it was important to hear the FCA perspective, as well as putting forward our own position on behalf of AMII members, and there was an acknowledgement that broader recognition of the healthcare sector is required.

“Intermediaries generally have no concerns regarding the current and future premium disclosure requirement including the increase in cost. However, they have expressed significant concerns to us regarding the annual renewal suggested disclosures and in particular the mandatory Year Four statement.”

Members’ concerns include:

• The potentially negative impact on consumer confidence in intermediaries

• The potential for the statement to place a substantial bias on price, not value

• The negative impact which encourages “churning” as a result of placing cost above value

• The likelihood of higher initial pricing by providers driven by a reduced expectation on business persistency

Added Stuart: “Those who are offering genuinely independent and impartial advice have little to fear. However, AMII would be concerned about the impact on any insurer who writes direct business and any intermediary operating a Solus arrangement with a single insurer

“It was a positive and productive meeting which will see AMII included in the consultation process on healthcare insurance related regulation moving forward, reinforcing the significant part our body has to play on shaping our industry.”