The Association of British Insurers (ABI) has published a Code of Conduct to ensure that members are treating their customers fairly when dealing with claims where a non-disclosure of information has been innocently made by a customer.
The guidance on non-disclosure, which has updated the version published by the ABI in January 2008, has been given the status of a Code of Conduct to ensure that all members are aware that the guidance is not optional, but mandatory. The code has also been extended to cover group protection.
The ABI state that figures released by the Financial Ombudsman Service (FOS) suggest that since the first guidance was published in early last year referrals to the FOS have been halved.
The Code covers the fair treatment of claims for individual and group life, critical illness, income protection and other long-term protection insurance contracts in the UK. The guidance has been produced in the light of changing market practice and the Financial Services Authority's treating customers fairly (TCF) regime.
The guidance sets out the three types of categories of non-disclosure and their associated outcomes for claims. In this guidance non-disclosure includes a misrepresentation of material information requested by the insurer. As with the earlier guidance the following applies: where there has been an innocent non-disclosure a claim should be paid in full; where negligent, a proportionate remedy should be applied; and, where a non-disclosure is deliberate or made without care the claim should be avoided.
The guidance explores various considerations to be taken into account in assessing claims such as the role of intermediaries and how medical information has been gathered.
For further information: ABI guidance - ABI code of conduct on non-disclosure