The Association of British Insurers (ABI) has said no-one should face a barrier to accessing financial services and highlighted the importance of clear communication and transparency from insurers.
The ABI issued the statement in response to a Money and Mental Health Policy Institute (MMHPI) report which found people with mental health problems being written off for cover was common right across insurance – including the protection sector.
The institute told Health & Protection about an income protection (IP) policyholder who was left homeless after a claim was declined due to their mental illness.
The MMHPI added “many” mental health sufferers report facing price increases, exclusions and declines after declaring their condition to secure life and income protection insurance.
In response to the report, the ABI said: ”No-one should face a barrier to accessing financial services and our members recognise the importance of being able to offer accessible, affordable cover to as many people as possible.
”Clear communication and transparency around decision making is crucial which is why we launched the Mental Health Standards to improve support for people with mental health conditions when applying for travel, health or protection insurance.
”While pricing is a matter for individual firms to decide, the standards include the need for underwriting approaches to be reviewed regularly using up-to-date data and credible evidence and set out how insurers can explain decisions clearly and provide more options for customers to communicate with them.
”If anyone is struggling to obtain cover, specialist providers are available to help.”
The MMHPI is calling for the Financial Conduct Authority (FCA) to urgently investigate whether people with mental health problems are being unfairly penalised by insurance providers.
It also wants the regulator to ensure insurance pricing decisions are compliant with key financial regulations and legislation such as the Equality Act 2010 and is urging the FCA to set out specific expectations for the industry around how firms can provide fair value for customers with mental health problems, particularly where cover excludes their mental health.