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ABI calls for removal of TPD by 2010

The Association of British Insurers is proposing that total permanent disability be removed from all critical illness policies by 2010.

In its statement of best practice for CI cover consultation paper the ABI proposes that the statement “stipulate that TPD, in any current form, should not be included within CI polices” by the end of 2010.

Instead of including TPD, it has devised a set of model definitions that it believes will be clearer to customers about what is and is not covered, and which insurers should implement.

The ABI also hope its proposals will make a clearer distinction between CI and income protection policies.

New definitions include cardiomyopathy resulting in a marked loss of the ability to do physical activity, complex regional pain syndrome with clinical symptoms lasting for at least 12 months and chronic severe rheumatoid arthritis resulting in a loss of the ability to do specified physical activities.

Other definitions include loss of a hand or foot, respiratory failure resulting in breathlessness even when resting, severe brain damage resulting in permanent symptoms, severe Crohn’s disease, severe specified mental health conditions and specific surgery for back and neck conditions.

Clarity around the definition of cancer and Parkinson’s disease has also been proposed, alongside a new requirement for policyholders to be unable to carry out three out of six specified activities of daily living.

The ABI is also proposing that members update the current model terminal illness definition, and that members should standardise the wordings insurers use for excluding pre-existing medical conditions for children’s CI cover.

The ABI has written to all its members asking for their feedback on a set of 18 questions.

A response from each firm is to be submitted by September 30.

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