The Nursing Home Fees Agency (NHFA) fully supports the government in any proposal for the Financial Services Authority to regulate long term care (LTC) financial products, advice and marketing. The NHFA recognises the need to understand how the complexities of our care system fit in with financial advice and LTC product development. Because of this, the NHFA has always treated all LTC products as if they were regulated.
We support regulation on the basis that, unlike other protection insurances, the need to understand the complexities of community care legislation and the benefit system is essential when designing, marketing or selling LTC financial products.
This is because, unlike other forms of protection insurance, LTC products are either replacing or supplementing means-tested state provision.
Planning for LTC is an integral part of financial planning for retirement and the purchase of LTC insurance or immediate need products can involve substantial sums of money. Regulation will ensure that the advice process will take into account the appropriateness and affordability of products to individuals who may not have significant means but may, however, fail the state means test for care.
Those with an immediate need for care or at the point of LTC insurance claim could be considered vulnerable even if it is the family dealing with their finances. This is because the need for care often arises when least expected, perhaps as a result of a stroke or a fall. Families are then faced with making fast decisions on matters of which they may have very little understanding. Regulation of the advice process will provide the public with the services of advisers who understand the care and benefits system and the reassurance that recommended financial products can complement what the state must provide rather than replacing it.
The regulation of all LTC products could be seen as necessary to ensure a level playing field. On the other hand, however, regulation may restrict the opportunity for developing products that need not necessarily fit into the criteria of those replacing or supplementing state provision. For example, those products that deliver private care services and/or equipment to promote independence and delay the need for LTC at a stage of dependency that is earlier than when the state might intervene.