RANT! It appears that our regulator, the Financial Conduct Authority (FCA) does not understand private medical insurance.
After a review of the household and motor insurance markets, the FCA has introduced new regulations that also apply at the renewal of medical insurance policies, consumer clients must now be warned that they should shop around to see if they could save money. Our view is that buying medical insurance based solely on price is completely the wrong approach.
As an independent intermediary we thought we did the shopping around for our clients? As health insurance advisors we thought it was our job to advice our clients so that they paid the lowest premium whilst taking into consideration the health circumstances of our policyholder?
Apparently the FCA thinks that that’s not what we do and that you should shop around yourself! Bizarre.
Medical insurance is a complicated area and simply buying based on the lowest premium is extremely dangerous. When moving from insurer A to insurer B it is vital that due consideration is given to how the move would impact on cover for pre-existing conditions. There’s a real danger that an individual buying without advice could make a short term saving and then miss out on cover for a pre-existing condition. The new insurer could refuse a claim that ended up costing the policyholder thousands of pounds if they chose to “self-pay” for private treatment. Even more concerning a wary purchaser could lose cover for life saving treatments where costs could run into hundreds of thousands or even millions of pounds.
As you may be detecting from our tone that we don’t agree with the latest FCA diktat, we’ll comply as we don’t have a choice but we’ll continue to feel that if you’re one of our clients that you’re already in good hands as we’ll review the market for you at every renewal.
The new regulations can be read here on the FCA website; https://www.fca.org.uk/publications/increasing-transparency-and-engagement-renewal-general-insurance-markets-ps16-21
