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Axa aims to cut out caveats in ending duty to disclose

Axa is looking to scrap its customers’ ongoing duty to disclose for protection policies.

Last month, Legal & General scrapped the ongoing duty to disclose rule, which requires consumers to notify the insurer if their health or circumstances change in the time between submitting their protection application and when their policy starts.

Axa says it wants to take this a step further. Its primary reinsurer has agreed to the move but it is still in talks with four other reinsurers.

L&G’s decision to scrap the rule was welcomed by many in the industry but some critics believe it could be misleading because, for online applications, the consumer’s responsibility to disclose does not end when the application is submitted but when the confirmation declaration, a printed copy of the completed application form which is sent to the client to check, is signed and returned.

Axa chief underwriter Mike Taylor says these details could result in consumers mistrusting the industry when scrapping the rule was designed to build trust.

He says: “We think what L&G has done is really positive but we want to take it a step further. L&G has a number of caveats but we feel that if you are going to do this, you cannot have caveats because it creates consumer mistrust when what we are trying to do is build trust.

“We do not want a headline message with a series of buts behind it so we have a bit more work to do.”

L&G protection marketing director Alan Ferguson says: “There are inevitable differences in the architecture of the application process used by each provider. This will always be the case and will create marginal differences in timing. Any discrepancies or differences will be very, very marginal relative to the real impact on advisers and particularly customers.”

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