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Health firms slated by OFT

The Office of Fair Trading has criticised health insurers for not giving consu mers clear information on premium increases on private medical insurance policies.

The comm ents, published in the OFT&#39s in-house magazine, Fair Trading, high light serious concerns with sales and self-regulation of moratorium-based health insurance products which insurers use to exclude pre-existing conditions for a specified period.

The OFT says providers have failed to act on several of its ongoing concerns, including product developments, which make it easier for consumers to decide whether it is worth paying extra for additional cover.

The OFT also says some critical-illness insurance policies do not make it clear to policyholders if policies are terminated following a successful claim although it did recognise improvements in sales literature, making product comparisons easier.

Outgoing director-general of Fair Trading John Bridgeman says: “Health insurers should understand people would be more willing to buy complex products if more effort were made to explain what was involved. Vague warnings about the escalating cost of premiums and conditions attached to moratorium-based policies do not address all our concerns.”

But ABI manager (media relations) Vic Rance says: “It is not correct to say the industry has not resp on ded to issues concerning PMI premiums. The OFT will never be satisfied until we do exactly what it says although we have pointed out the practical difficulties of doing this.”


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