In its response to the ABI’s statement of best practice for critical illness, the reinsurer questions whether the number of declined TPD claims is as big an issue as the ABI has portrayed it to be, and how many of those declined claims were due to non-disclosure.
Head of marketing Andy Milburn says: “Whilst the ABI are right to say there is an issue with TPD, when you look at it in the grand scheme of things it doesn’t look like as big an issue as they are making out.
“Could we have spent all this effort and time on something else with a bigger issue?”
Milburn says the reinsurer is not happy with some of the new definitions put forward by the trade body, such as mental health conditions, and says rather than remove TPD the ABI should give policyholders the option to select TPD as an add-on or allow life offices to develop their own TPD-based products as optional rider benefits.
The statement also questions the viability of adding a new set of definitions in place of TPD, suggesting it could complicate the product and lose the message it is trying to get across to the consumers.
Milburn says: “No one has agreed with what the ABI has put forward so rather than rail road what could be the wrong solution through in order to get it in next year, we think the ABI needs to take a step back, look at what everyone has fed in to them during the consultation process, and then conduct a further consultation with the industry and almost get them to vote.”
Legal & General managing director for protection and chairman of the ABI protection development committee, which issues the statement of best practice, Bernie Hickman says: “This is a genuine consultation and we will be looking at the results that come back and deciding how to respond. If there are fundamental issues that need further work it could be that a further consultation is appropriate. All options would be considered. This is not an easy problem to solve and if people have got concerns over it, solutions are very welcome.”