IFAs have criticised protection providers for stalling on their adoption of the Association of British Insurers' new critical illness definitions, warning there will be a "deluge" of changes over the next six weeks.
Providers are required to adopt the new CI definitions by April, but so far only three providers in the individual protection market – Norwich Union, Royal Liver and UnumProvident – and one in the group protection market – Canada Life – have done so.
Alan Lakey, partner at Highclere Financial Services, warns that IFAs will have to cope with a “deluge” of changes over the next six weeks as providers rush to introduce the new definitions before the deadline.
In addition, Lakey says there will be a period of time when advisers are clueless as to the exact changes each provider has introduced.
He states: “When providers introduce something IFAs get the edited highlights from press releases and the providers’ websites, which say where the providers have exceeded something. But it is not until later that we realise where they may be inferior.”
Jon Briggs, protection research manager at Hargreaves Lansdown, says: “I don’t think there is any excuse for providers not already adopting the definitions. I don’t know why they are dragging their feet, unless they want to see what other providers do first. There is no reason why they could not have adopted the changes more quickly.”
But Briggs believes it would have been better if the ABI had given one date on which all providers had to introduce the changes, as this would have given IFAs more certainty and enabled them to compare the changes more easily.
Mark Locke, a spokesperson for Aegon Scottish Equitable, says: “We will be meeting the deadline and we intend to introduce the changes mid-April. We’re going to adopt them in line with changes to our marketing literature, as this is an ideal opportunity to bring the new definitions in.
"I imagine the providers that have already adopted them were introducing new products or it was an opportune time to do so. There is no rush to adopt the changes and we don’t want to risk getting it wrong,” continues Locke.
Roger Edwards, products director at Bright Grey, adds: "We thought the majority of providers would adopt the changes on the same day so there wouldn't be a long period of time when both definitions were available at the same time. There is no difference between the definitions we have to adopt and the ones other providers have to adopt, so all IFAs need to know is the date on which the changes are made."
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7034 2680 or email [email protected].IFAonline
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