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ABI wants local councils to refer business to LTC firms

The ABI is in discussions with the Government over a new long-term care product which would see local authorities act as an introducer to pensioners on behalf of a licensed LTC insurer.

ABI head of health Richard Walsh says the scheme would see local authorities referring business to an insurer they had signed a contract with.

Walsh has reassured IFAs that they would not be eliminated from the sch-eme because the number of factors involved in LTC funding decisions would still leave room for advisers.

Walsh believes consumers would benefit from the involvement of local authorities because, through their involvement in setting care home fees, councils could negotiate a better deal for policyholders.

When claims are made, money would be paid to the authority which would then pay the relevant care home. Policyholders would have the choice of going with a nursing home their council had signed a deal with or they going it alone.

The ABI is concerned at the low take-up rate of LTC products and the fact that many elderly pensioners have not made provision to guard against care costs.

It first raised the idea in its submission to the Derek Wanless consulta-tion on future funding models of healthcare following last November&#39s pre-Budget report.

Norwich Union long-term care strategy manager Sandy Johnstone says: “The combination of a public authority seen to be an integral part of private funding and individuals seeing their own bills decreasing through collective negotiations would be an effective one.”

Care Funding Bureau head Owain Wright says: “The fact that local authorities may be saying, not only do we recognise there is a need to make provision but we can also point you in the right direction can only be a good thing.”

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