The Financial Conduct Authority (FCA) is “keen to understand” what the effect of pre-existing condition exclusions enacted by insurers are having on the protection market as part of its market study.
Answering a question from Health & Protection at the Association of British Insurers’ (ABI) A changing regulatory landscape event, FCA director of insurance Matt Brewis noted it was a complex subject.
“Exclusions can make sense,” he said.
“But sometimes understanding what impact that’s having, that’s a part of what we’re trying to understand.
“So we’re open minded and keen to understand that.”
Increasing exclusions
The issue of pre-existing condition and other exclusions was added to the subjects under consideration for the FCA’s pure protection market study as part of the final terms of reference issued in March.
Such exclusions can limit the range of people who are able to access protection insurance products or the price at which they can do so.
At that time, the FCA said: “We have also been told that insurers have increased the number of policy exclusions over time.
“This has reduced the pool of people eligible for headline premiums and increased the pool of people who find it more difficult to access appropriate cover at an affordable price.
“We will examine how well vulnerable consumers are currently served and, if not, examine the reasons why.”