Changes in the treatment of protection claims where medical information has not been fully revealed will not mean consumers can be more relaxed in their disclosure, AEGON warns.
The Association of British Insurers (ABI) yesterday introduced three categories of non-disclosure designed to improve customer clarity and confidence in the protection arena.
The three categories, which replace previous guidance by the ABI, are ‘innocent’, resulting in the claim being paid in full, ‘negligent’, applying a proportionate remedy, and ‘deliberate’ or ‘without any care’, resulting in a declined claim.
AEGON says the changes will improve the protection market but has a warning for consumers and advisers.
Rod McKie, head of marketing, individual protection, says: “This is a very positive announcement by the ABI and it makes absolute sense to have the one category of ‘negligence’ whereas previously there were two.
“These changes do not reduce the importance of full disclosure and these measures do not mean that people can be more relaxed in their disclosure.
“AEGON works closely with advisers to encourage full disclosure and will continue to do so in the future.”
The firm says the new approach assures customers that product providers will never actively try to avoid paying a claim.
It adds the new proportionate payment approach will increase payments across the industry.
The changes, which apply to critical illness, income protection and life insurance products, were yesterday described as "pioneering" by the ABI, who said they will lead to more claims being paid.
The guidance, drawn up in consultation with the Financial Ombudsman Service and ABI member companies, comes into immediate effect for new and existing protection insurance policies.
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