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Sector rallies against ABI proposal to scrap TPD

Protection experts are calling for the Association of British Insurers to rethink its proposal to scrap total permanent disab- ility from critical-illness plans as part of its statement of best practice paper.

Last year, the ABI said it was working on a consultation paper, to be published in July, that will allow the industry to get rid of TPD altogether and introduce a number of new conditions.

But Bupa Individual Protection head of product development Steve Casey says the firm is “strongly” against removing TPD completely from CI plans.

He says: “We do not believe this is the right way. I want to make sure that what it is potentially being replaced with is totally appropriate in meeting consumer needs and that it can be priced from a risk perspective.”

Direct Life and Pensions Lifequote key accounts manager Phil Jeynes says: “TPD defini- tely needs an overhaul but the fear is that it gets scrapped completely because it is that safety net under all the other definitions.”

Bright Grey product director Roger Edwards feels that TPD should only be removed if the new conditions will provide the same cover.

An ABI spokeswoman says: “Over 50 per cent of TPD claims are rejected so there is not an option to do nothing with TPD. For the sake of the consumer and for people to be able to sell policies, we have to do something.”

The consultation paper is out in July and the ABI is calling for debate on the subject.

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