The Office of Fair Trading has carpeted health insurers for a third time over the price comparability of their products.
Following on the heels of two earlier critical reports on PMI, critical illness and income protection cover, the OFT found that product literature had improved, but insurers have not published average increases in PMI premiums over the past five years as the watchdog had suggested.
The OFT also criticises PMI providers for failing to address its earlier reported concerns on the sale of moratorium-based policies.
The OFT said this meant consumers could easily be misled into thinking they are covered for more than they really are.
As a result of its findings, the OFT said the PMI market's self-regulation of moratorium-based policies needed bolstering. It has also advised insurers to conduct research into whether policyholders are foregoing medical advice during the moratorium period.
Some of the other OFT recommendations have still to be acted on. These include its recommendation that insurers develop critical illness products to cover the handful of core conditions that account for 95% of claims, so policyholders can assess if it is worth paying for additional cover.
The ABI said it was pleased the OFT had endorsed the progress that had been made, but was disappointed by its criticism on premium increases and moratorium policies. In a statement, it said: “The industry is committed to improving continually the clarity and transparency of policies to help consumers to purchase the best schemes for their needs.”
