At the end of 1998, the MI working party was created to enable the industry to make a unified response to the criticisms contained within the Office of Fair Trading’s (OFT) two health insurance reports. By the middle of 1999 it had tackled the main criticisms, introducing guides to aid consumers and comparable benefit tables and renamed itself the PMI panel. Its actions were well received by the OFT, and, now that the industry is working together, it is keen to continue the good work.
Two sub-groups are currently evaluating other areas of the market; the first is looking at creating a set of common definitions; and the second is working on a code of practice.
Julian Ross, Prime Health’s head of marketing, chairs the common definitions sub-group. “Determining common definitions is important for both the customer and the medical profession,” he explains. “Some terms, such as in-patient, seem clear, but the definition may be less so on some products, for example, on in-patient only cover. It is important that there is consistency among the insurers.”
Arriving at these common definitions has been moving along quite smoothly, but not without some hitches. “We began with between 15 and 20 words to determine common definitions for, but this has shrunk a bit since then,” Ross comments. However, as words have been removed from the list, perhaps because not enough companies use them to necessitate an industry-wide definition, others have been added.
To determine the definitions, the sub-group split into pairs, each tackling different words. Definitions are then bounced around other members of the sub-group and with colleagues. “Definitions are taken back to member’s companies to the claims assessors, for example. They work on the front line and can say why certain wordings wouldn’t work,” says Ross.
And Ross is very conscious of the implications of a definition being obscure. “Even something which appears straightforward, like the definition of treatment, is complex in its own right. It’s not simply a case of changing words; these new definitions can affect other areas of a policy.”
Once the sub-group arrives at common definitions it will take them to the Association of Medical Expenses Insurers claims forum to ensure that the industry will buy into the changes. And to ensure greater clarity for the customer remains the focus of the changes, the sub-group is working with the Campaign for Plain English. Additionally, Ross hopes that companies with words specific to their own policies will look to ensure definitions are easy to understand.
The deadline for the sub-group to determine common definitions is the middle of the year, with definitions to be implemented by insurance companies soon after. Ross is confident these deadlines will be met. “Companies have learnt not to be precious about their own definitions,” he adds.
Statement of practice
The second sub-group, which is chaired by BUPA’s head of technical support Richard Galley, is looking at creating a statement of practice for the PMI market.
“The OFT report in 1998 suggested there was a need for some form of regulation or self-regulation,” says Galley. “It had really overlooked the existence of the ABI code but there was a need for a redesign.”
So the sub-group looked at the ABI code and, as Galley describes it, “took it apart and put it back together again”. The new version has a different emphasis that, members of the subgroup believe, better reflects the workings of the PMI industry.
However, before it can be accepted, Galley is keen to gain industry support for the new code. The inclusion of intermediaries on the panel will help ensure the code is relevant. Additionally, the panel is seeking approval from the General Insurance Standards Committee (GISC).
But while the code is equally important for the industry there is not the urgency surrounding this subgroup that exists for that dealing with common definitions. Galley explains: “The introduction of the statement of practice is driven by the actions of the GISC, and while it is good to have something in place, it is no good if the GISC is not ready to enforce it.”
And although happy with the panel’s progress so far, both Ross and Galley admit that there is more work to be done. Research will be undertaken into renewals and the information provided to customers at that stage. The group PMI market will also be examined, with a particular focus on terminology and switching.
“We do need to get our own houses in order, “says Galley. “There is more we can do to gain the government’s trust, which would make it more likely for us to have a dialogue about provision with them in the future.”
But, in the meantime, it is good to see the industry taking sensible steps in the right direction.