ABI Launches Consultation Process Into Critical Illness Cover

9th July, 2009

The Association of British Insurers (ABI) has announced a three month consultation process, regarding making changes to its statement of best practice for critical illness cover - specifically the Total Permanent Disability Clause.

Replacing the Total Permanent Disability (TPD) clause is the main change proposed. The ABI are considering instead a set of carefully worded definitions to clarify to customers exactly what is and isn't covered.

Nick Kirwan, the ABI's Assistant Director in Health and Protection, said, "We have seen the number of declined claims fall significantly as a result of our ongoing determination to tackle this issue. This consultation builds on our work and should see the number of declined claims fall further".

Though the majority of critical illness claims are paid swiftly as they are based on a straightforward diagnosis, this is unfortunately not always the case with TPD. TPD accounts for only 3 percent of claims, but 55 percent of these are rejected due to the definition of Total Permanent Disability not being met. Mr Kirwant added:

"We've been in long and detailed discussions with medical experts about the causes of most Total Permanent Disability claims. As a result, we are confident that the new set of definitions provide clarity and a better understanding about what makes a valid claim."

Managing Director of Protection at Legal and General, and Chairman of the ABI's Protection Development Committee which is responsible for regularly reviewing the statement of best practice for critical illness cover, said:

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