ABI and Law Commission team to create claim-handling guidance for insurers
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The Association of British Insurers and the Law Commission have produced a new claim-handling process for insurers to reduce the time it takes to pay out on life insurance claims.
They have developed best practice guidance which asks claimants to provide insurers with evidence they are the main beneficiary, such as marriage certificates or mortgage deeds, rather than waiting for the legal process to prove it.
Claimants agree to pay back any money they get from the policy if the legal process decides they were not entitled to it.
The guidance has been designed to apply to new and existing policies but will not apply where the circumstances of the death are suspicious or the estate is complicated.
Research carried out by reinsurer RGA last year on behalf of the Investment & Life Assurance Group found that the average settlement time for death claims was 73 days.
The ABI says the process could reduce the length of time it takes to pay out on death claims to four weeks in straightforward cases.
Director general Otto Thoresen says: “Dealing with bereavement is hard enough, without the added stress of worrying about money.”
Plan Money director Peter Chadborn says: “This seems like a worthwhile exercise. Anything that reduces clients’ claim time is a good thing.”
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