Johnny Timpson is working with an insurance law expert on options for legal or regulatory remedies enabling insurers to split life cover policies where there is evidence of economic abuse.
Timpson (pictured) spoke to Health & Protection following the publication of charity Surviving Economic Abuse’s report earlier this week on Insurance and Economic Abuse, which was funded by the Aviva Foundation.
The report contains 10 recommendations for insurers to take action on economic abuse. These include carrying out tailored training to equip staff to recognise economic abuse, conducting product reviews and developing new processes and ways of working.
Timpson, who is an adviser to the charity and helped develop the recommendations, told Health & Protection he has been working with professor Jim Davey, who is professor of law at the University of Bristol law school and an insurance law specialist.
He explained that joint life policies were often used as a form of coercive control where a partner can find themselves covered by a policy they have not given their consent to and that action needs to be taken so these can be split into separate policies.
“You can only do that with the consent of both parties,” Timpson continued.
“And when you have an abusive party which is also the one paying the premiums that refuses to give consent to either cancel the policy or split it, there’s nothing the insurer can do at the minute.
“So what professor Davey and I are looking at is either a legal remedy, as they have in the US, or a regulatory remedy that would enable insurers to split policies where there is evidence of economic and financial abuse.
“That’s a paper Jim and I are working on now and we will be bringing out via the charity shortly for discussion with the industry at the Insurance Institute of London over the coming months.”
Recommendations to tackle abuse
The 10 recommendations put forward by Surviving Economic Abuse in its report are:
- Build the capacity of staff to recognise and respond to domestic abuse including economic abuse, through employee inductions and training.
- Communicate regularly with customers and employees about domestic abuse including economic abuse, and share positive changes in practice to build trust with victim-survivors.
- Create conditions which encourage disclosures, such as external information that victim-survivors can access to find out what support is available, for example UK Finance’s It’s your money leaflet for customers.
- Minimise the number of times a victim-survivor needs to share information about their circumstances through discreet and enhanced data recording.
- Invest in reviews of products and processes to ensure the safety of victim-survivors, particularly in relation to the security of confidential information and communication preferences, in line with the Consumer Duty.
- Put processes in place that enable empowered staff to have greater flexibility around terms and conditions or policies when it is appropriate and necessary to do so.
- Develop new ways of working to reduce barriers to insurance for victim-survivors and respond to their needs. For example, inform customers they can step away from digital and automated processes, making it clear how victim-survivors can speak to a staff member directly.
- Support employees who are affected by domestic abuse including economic abuse or are working with customers affected by it. This could include creating an official domestic abuse policy and providing guidance to leaders on how to support and signpost staff.
Insurance industry more broadly
- Work across the industry, including with the Association of British Insurers, to develop improved practices for the separation of joint policies in cases of economic abuse.
- Explore mechanisms to reduce foreseeable harms for victim-survivors where abusers can use insurance to perpetrate economic abuse. For example, reviewing the end-to-end customer journey to establish how abusers may exploit certain products – such as taking out a life insurance policy without the victim-survivor’s prior knowledge or consent.