The Association of British Insurers and the Government have signed a joint “statement of intent” to help people access regulated advice and a wider choice of financial products.
The Care Bill, which is currently being debated in the House of Lords, sets out proposals to cap the overall cost of care at £72,000 from April 2016.
Policymakers hope the reform will encourage the insurance industry to develop long-term care products.
However, last week former care minister Paul Burstow told Money Marketing the Care Bill risks the “spectre of a misselling scandal” unless regulated advice is given a more prominent role.
The Government and the ABI have now committed to boosting the role of advice and helping the insurance industry offer a wider range of long-term care products.
ABI director general Otto Thoreson says: “The insurance industry can play an important role in developing solutions to help people fund their long-term care needs.
“We have supported the introduction of a new care funding model, and believe the Care Bill provides a sustainable framework for both industry and consumers.
“The statement of intent sets out our commitment to working with the Government to create the conditions for the development of an insurance market that offers a range of products to help people meet their long-term care needs.”
Care and support minister Norman Lamb (pictured) adds: “The current care and support system doesn’t work and is hugely unfair. People face losing almost everything they’ve worked hard for or being forced to sell their family home in a time of crisis to pay for the care they need.
“Our reforms will not only stop this from happening but will provide the industry with the certainty it needs to develop products that can help people plan for the future.
“I welcome this commitment from the industry and am excited to see how they take on the challenge of helping transform the way we pay for our care.”