The Treasury is considering its next move following the deadline for responses to its consultation document on the regulation of the long term care (LTC) market.
While most respondents support the introduction of regulation, some think that the proposal of Cat (cover, access and terms) standards needs additional work before it can be supported.
There were four options for the insurance industry, charities and interested parties to consider, but the government has already made it clear that the third option – full regulation by the Financial Services Authority – is the solution it favours.
Additionally, the Treasury proposed that Cat standards should be set for minimum standards for LTC products so that buyers know precisely what they are purchasing.
The Continuing Care Conference (CCC), whose members include financial service providers, consumer groups, and public service organisations “welcomes and supports” option three.
However, it believes that LTC products need to be sold by informed advisers, and widening the scope for regulation for other products would delay implementation.
The CCC also welcomes the intention to extend the Cat standard concept because of the need to understand the many potential features of a LTC contract. But it thinks significant additional work will be needed to develop standards that meet the Treasury’s objectives.
The CCC added that as its members have practical experience of providing and assessing care, their input would be useful in defining the purpose of the Cat standard on benefit eligibility and then on drafting appropriate definitions to meet this purpose.
IFACare supports option three and is in favour of Cat standards. Chairman Graham Fidoe said that Cat standards will help create more confidence in the sector but would not necessarily be the best option for all clients.
PPP lifetime care’s marketing manager, Paul Bennett, said: “We are in full support of regulation and the introduction of Cat standards and we look forward to hearing what the Treasury’s next step will be and to what timetable.”
But actuaries and consultants firm Bacon & Woodrow responded by saying it supported option three though warned against imposing Cat standards on the industry at this stage.
Spokesman David Gulland said: “LTC insurance is a complex and, as yet, underdeveloped market place and we can’t endorse the development of ‘minimum benchmark standards’ for a product that is still in its infancy.”