Here’s a little task for the Queen when President Obama visits in May. She can put him right on the special relationship. The decades-long entente may be a bonanza for him, but we’re paying the bill.
Only recently have US officials actually got round to letting us Brits into their country without a visa. But Uncle Sam still wants to know if we’ve got HIV, plan an act of terrorism or are importing a Cheddar cheese sandwich. In contrast, we beg them to come here, forgive them for wearing golf trousers in Harrods, politely ignore their brash talk and overlook their table manners.
The US, it seems, can instantly extradite any British citizen it wants for overstaying on a parking meter. We have to employ a dozen QCs for a year to extradite an American mass murderer. They lock us up in Guantanamo; we don’t even complain.
To cap it all, Obama’s first act on becoming president was to remove the bust of Churchill from the Oval Office.
When it comes to insurance, it’s the same old story. The self-styled land of the free, pioneer of independent medical care and standard-bearer for private health insurance just doesn’t want to know us. Why are UK-based international medical insurance providers excluded from the US, while Britain is full of American bankers with policies from Cigna, AIG, IMG (US) and American Express?
Of course, UK-based insurers and intermediaries can legally sell plans to US-bound Europeans. But unlike their US-based counterparts, they cannot legally renew after a year. This point is probably missed – or blithely ignored – by some brokers.
But according to Stephen Walker, former chairman of the Association of Medical Insurance Intermediaries, brokers could be exposing themselves to legal redress or having to compensate a policyholder who was unable to renew. Such a case would obviously be particularly awkward if the individual had developed a serious medical condition during his or her first year across the pond, leaving him or her unable to renew with another provider.
Walker has raised the question with the Association of International Medical Insurance Providers (AIMIP). He has written to the association, complaining: “It’s very worrying from a broker perspective as we need to provide our clients with accurate information.”
He expands to Health Insurance: “The trouble is that some front-room staff at insurers have no idea. If we [advisers] are not getting the right information from insurers, how can we advise the client?”
Walker, of Medical Insurance Services in Brighton, continued: “We have always been very wary for that reason – we never recommend a policy if the client is going for more than a year.
“And recommending a plan from a UK or European subsidiary of a US company doesn’t really help because the UK subsidiary is treated as non-US. America is very protective of its markets – whether insurance or anything else.”
Walker is sceptical as to whether brokers, or indeed insurers, really know or care about infringing.
He adds: “Some insurers say it won’t be a problem renewing – I’m not sure about the validity of that.”
Other figures in the insurance industry say privately that UK-based insurance companies and brokers will sell you a policy for the US without telling the purchaser that renewal would be unlawful. After all, as long as the insurer fulfils its obligations, the treating hospital is unlikely to kick up a fuss as long as it is paid.
Contravening US rules may arise as much from ignorance as desire to make a sale. A proliferation of regulations in the US is partly to blame.
For that reason, insurer InterGlobal errs strongly on the side of caution. It does not recommend sales of any of its plans to non-US citizens travelling to the states if they intend to spend more than half a year there.
Paul Weigall, the comapany’s global head of sales and marketing, says: “Our understanding is that if anyone who is going to reside in the US more than 180 days in the year, they should get a US policy. Up to 180 days you’ll get away with it.
“The trouble is that every state varies. Each has its own rules as to what you can and can’t do. People think of the US as one country. But it’s effectively 52 countries as far as insurance goes. So you can never be too sure – and that’s a reason frankly why some people in the industry just leave the US alone.”
Weigall continues: “It’s unlikely that a hospital would refuse treatment or indeed refuse payment [from an international insurer], it’s a question of whether local regulations have been followed and fines and penalties if they haven’t.”
AXA PPP International takes a more relaxed line than InterGlobal. But only to the extent that InterGlobal’s six-month limit extends to one year – which seems to be nearer the industry standard.
Karen Teasdale, the company’s overseas marketing manager, says: “It’s made absolutely clear to members that they won’t be able to renew after a year. We won’t let people purchase a policy online. They have to speak to a sales adviser.
“When they speak to a sales adviser and get a quote they are told it is not renewable and the reasons are explained to them. It’s also made clear in their policy document that it’s only for a year.”
Teasdale, who is clearly dismayed at the way UK companies are handicapped compared to their US rivals, said there was no legal way round the renewal embargo. Even if the policyholder returned to UK shortly before expiry of cover and sought to renew while physically outside the US, the insurer would not oblige.
“The contract is for 12 months and if the purchaser sought to renew that would be an extension of the contract and we would not do it. If they came back for an extended period, ended their international policy then took out a new one, I believe that would be okay. But if they dropped back to UK for a couple of weeks – no, we wouldn’t have that.”
What rankles is that the other way round is perfectly lawful. An American expatriate in Europe can renew medical cover at any time point without qualms.
UK providers see America’s restrictions as protectionism pure and simple.
It’s costing serious business, says Teasdale: “If you consider IPPR research which estimates that 829,000 UK nationals live in the US and there was an increase of 20% between 2005 and 2008, you can get an idea of how much this costing the insurance industry in UK.”
However, solutions look remote. The European Union could pursue the matter as the entire continent is affected. But it has bigger worries.
The subject is hardly even on the radar of the Association of British Insurers (ABI).
“It’s restrictive and it’s an obstruction of an overseas market,” says Malcolm Tarling, spokesman for the ABI. “But we have to live by the laws of other lands.”
The outlook is hardly more positive with the body more directly concerned – AIMIP. It reports “no current direct plans” to tackle the issue.
The association said: “It is up to the individual AIMIP member to choose how they approach US legislation, although it may be something that warrants a fact sheet in due course, or at least mentioning at a meeting if it is an area of concern or interest amongst brokers.”
Carl Carter, chief executive of IMG Europe, the UK-based affiliate of the US provider, maintains that such subsidiaries have to be extra careful, even if they are regulated by the Financial Services Authority.
“We want to be much more sure that we are within the US regulations,” he says. “Other non-US iPMI companies may often disregard the US regulations as they themselves are outside their jurisdiction – or they steer completely away from the US all together.”
Carter says the bar on renewal is emphasised to brokers.
“We always make sure of this, likewise this is highlighted in our application form and likewise at renewal we also have checks to ensure this is appropriate.”
Despite that, US insurers with European subsidiaries do not suffer in the round, because they will simply pick up the renewal business that their affiliates cannot. Furthermore, UK affiliates of US companies can angle their sales pitch to suggest that they are best informed on medical practices in the US and have additional incentives to conform with regulations there.
None of this helps the Europeans. And AIMIP is unlikely to pursue the matter with vigour because it’s only the Europeans who would ever complain. The association is still finding its feet: not the time for a split.
But there is no denying that the current “playing field” of international competition is as level as an Alpine ploughed meadow. Another nail in the special relationship?
Peter Pallot is a freelance journalist and regularly contributes to the Daily Telegraph on international medical insurance and other expat issues