Specialist PMI intermediaries are to form their own association in a bid to make their presence felt within the health insurance industry and to stave off potentially damaging regulatory legislation.
At a day organised by OHRA, 18 PMI intermediaries voted to establish a body to approach the Treasury and other trade bodies.
Sue Smith and Bill Poynton of Oxfordshire-based Health Care Plus were appointed to make the initial contact.
Intermediaries are worried that the draft replacement financial regulatory bill will impose unnecessarily draconian measures which could damage business.
“The Treasury’s regulatory reform team is not looking at non-regulatory products at the moment but the bill is drafted in such a way that a future political decision could allow for them to be included at a future date,” said Poynton.
He added: “The current legal requirement for PMI intermediaries is a minimum of £250,000 indemnity insurance on each and every claim. But this may not be acceptable in the future.”
Smith says there is uncertainty as to what the regulatory reform team will propose. Possible routes include asking for a solvency bond – which many intermediaries may find difficult to provide – or an auditor’s certificate.
Intermediaries are hoping that by establishing dialogue with the appropriate government and trade associations, they can avoid being bulldozed into outlandish financial contracts.
Poynton and Smith have already opened discussions on the issue with the ABI, the FSA and the Treasury.
Health insurers are following OHRA’s example and pledging support to the new group. Norwich Union and Prime Health have agreed to offer their help.