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FCA consults on insurance ‘signposting’ for people with medical conditions

Consumers will be signposted when cover is declined or exclusions are added

The Financial Conduct Authority (FCA) has launched a consultation on proposals that aim to help consumers with pre-existing medical conditions have better access to travel insurance products.

It proposes to introduce a new signposting rule, providing consumers with details of a directory of travel insurance firms that have the appetite and capability to cover consumers with more serious medical conditions.

Firms will be required to signpost consumers when cover is declined or cancelled mid-term due to a pre-existing medical condition, when cover is offered with an exclusion that cannot be removed, and where a consumer is offered cover with an additional loading to their base premium.

In addition to signposting, the FCA will be working with stakeholders to try to improve consumer understanding of the travel insurance market, including producing material on pre-existing medical conditions. This information aims to help consumers understand the implications of travelling with exclusions and how factors such as country of travel can impact medical costs and therefore travel insurance premiums.

Christopher Woolard, executive director of strategy and competition at the FCA, said the regulator wants to reduce the numbers of consumers who are faced with a choice of not travelling or travelling without insurance. 

The FCA estimates there to be up to 14.1 million consumers with a pre-existing medical condition that look to purchase travel insurance each year. Of these consumers, approximately 0.7% are declined cover and 11% purchase a policy with an exclusion for their medical condition.

Liz Foster, managing director of the Society of Insurance Broking, said the FCA must build on existing good practice as it develops its new signposting service.

She said: “While it is important to have consistency across the sector, consistency is only one element in creating good outcomes.

“It is essential that the FCA develops a system to measure consumer’s experiences throughout the signposting service, which can fully assess its benefits.”