The Association of British Insurers (ABI) says guidance it issued on protection non-disclosure has helped halve the number of disputed claims sent to the ombudsman (FOS).
Claims in Q1 2008 relating to critical illness, income protection or life insurance policies reached 85, FOS figures show, but had fallen to a provisional low of 40 by Q4.
Additionally, the ABI says its guidance, which came into effect on 1 January 2008, has been updated to a code of conduct, removing "any doubt" members may have had over whether it was mandatory or not.
"We're delighted this initiative has worked so well and complaints have halved," ABI director general Stephen Haddrill says.
"As always, it remains essential for people to answer all questions carefully, to the best of their knowledge and belief, when they take out any protection insurance cover.
"However, the code means no one should ever be worse off as a result of a genuine mistake."
The ABI unveiled the guidance in a bid to cut down on disputes arising from non-disclosed medical information given during the application process.
It introduced three levels: 'Deliberate or without any care', 'negligent' and 'innocent'.
The guidance made it clear an innocent claim should be paid in full while a negligent one should result in a proportionate payout. Deliberate non-disclosure would lead to the claim being declined.
The ABI says members "unanimously" supported the move.
Contact: Scott Sinclair, News Editor, 020 7484 9791 - [email protected]IFAonline
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