View more on these topics

ABI sets the standard with TPD definitions

The Association of British Insurers’ updated statement of best practice for critical-illness cover marks the end of the long-running industry debate over how to resolve issues with total and permanent disability.

The TPD clause within CI policies accounts for 3 per cent of claims but of those, around half are declined owing to a lack of clarity among consumers about what is covered.

The issue of how to improve the clarity of TPD was first raised as early as 2004. The following years saw the ABI call for the TPD clause to be scrapped, then rebranded, before settling on improving the definitions.

The updated statement of best practice, published last week, introduces a set of model definitions for TPD in a bid to better explain what is and is not covered and help consumers compare policies.

Insurers can choose to adopt one or more of the following standard TPD definition headings:

  • Unable to do your own occupation ever again
  • Unable to do a suited occupation ever again
  • Unable to do any occupation at all ever again
  • Unable to do three specified work tasks ever again
  • Unable to look after yourself ever again.

ABI assistant director of health and protection Nick Kirwan says the trade body’s work has attracted interest from other countries as the project marks the first standard TPD definitions in the world.

He says: “The new, more descriptive headings and standard definitions will help make the scope of TPD cover much clearer. The work on developing standard definitions for TPD will help ensure that critical-illness policies are clear and pay out in line with customer expectations.”

But Highclere Financial Services partner Alan Lakey says: “I do not think the clarity of the TPD definitions is the issue. The problem is that a successful TPD claim is assessed on whether the individual can carry out several task-based activities, which in my view is overly harsh.”

Master Adviser senior partner Roy McLoughlin says many consumers opted for TPD when income protection would have been more suitable.

He says: “If a large number of customers had taken out the correct policy, that is, income protection, there would not have been a problem with TPD in the first place.”

The statement of best practice also includes standard wording for the pre-existing conditions exclusion for children’s critical-illness cover and improvements to terminal-illness definitions.

ABI members will have to implement the new wordings as soon as is practical and no later than the end of 2012.


Chadney Bulgin acquires pensions specialist

Chadney Bulgin has acquired Berkshire-based pension specialist Pension & Wealth Planning. The move follows the purchase of the pensions and investment business Chandos Rose in 2008. The new operation will continue to operate under the Pension & Wealth Planning name and will have access to all Chadney Bulgin services. Joint managing partner Martyn Griggs says: […]

Stephen Knight quits due to illness

Portillion chief executive Stephen Knight has stepped down from his position with immediate effect after being diagnosed with a brain tumour. Former Portillion chief finance officer David Hill has been appointed chief executive while Barry Searle remains as chief operating officer. Chairman Gerald Gregory says: “We wish Stephen the best and would like to note […]

Ombudsman upheld 82% of investment complaints against Barclays

The Financial Ombudsman Service upheld 82 per cent of investment complaints against Barclays Bank for cases submitted between July and December last year. The latest data from the FOS shows Lloyds Banking Group topped the complaint list, generating 22,181 new complaints in the second half of 2010. The FOS received 12,234 complaints about Lloyds TSB […]

Henderson profits surge but it faces £7.6m FSCS levy

Henderson has received a £7.6m interim levy from the Financial Services Compensation Scheme as it announced a 37 per cent increase in profits for 2010. Underlying profit was £100.7m compared with £73.7m in 2009 and assets under management rose by 11 per cent to £58.7bn. The company has seen higher margin inflows of £2bn in […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm