Healthcare insurance - Chartered Insurance Institute · 12/18/2012 · Healthcare insurance products IF7 study text, 2011–12 edition Web update 02: 18 December 2012 The 2011-12/13

Web update

Healthcare insurance products

IF7 study text, 2011–12 edition

Web update 02: 18 December 2012The 2011-12/13 edition of the IF7 study text will now be valid for examinations until 31 August 2013. The 2013–14 edition will be published in June 2013 for exams from 1 September 2013 onwards.

Meanwhile, please note the following updates/additions to your copy of the study text (including replacement appendices 3.1, 6.1, 8.1 and 8.2):

Chapter 1, section B2, pages 1/4 and 1/5Final paragraph on page 1/4 and bullet list on page 1/5, replace with the following text:

On 27 March 2012 the Government’s Health and Social Care Act 2012 received Royal Assent. This introduces or confirms a series of reforms including:

• giving GP-led ‘clinical commissioning groups’ responsibility for commissioning, so bringing decisions closer to patients. They will manage around 80% of the NHS budget;

• primary care trusts and strategic health authorities will be abolished, reducing management staff by around 24,500 posts;

• establishing HealthWatch and local health and wellbeing boards within local councils;

• devolving power by supporting trusts to become foundation trusts, and through independent regulation;

• creating Public Health England; and

• reducing bureaucracy in arm’s length bodies.

The measures are also part of plans to achieve savings in the NHS up to £20bn by 2014/15. That will include freezing staff pay, shifting services from hospitals to the community and introducing greater competition.

For more information on the Act and what it means see: www.dh.gov.uk/health/2012/06/act-explained/.

Chapter 1, section E1, page 1/13, top of page, 1st paragraph, 2nd lineAdd ‘(P11D)’ before ‘.....benefit-in-kind’, and then insert the following sentence:

(Form P11D is used by employers to report benefits provided and expense payments made to an employee that are not put through the usual payroll.)

At the end of the final paragraph of section E1, add the following:

In the case of self-funded schemes (including trusts), the P11D benefit is effectively the cost per employee.

IPT is not payable on long-term insurance policies, such as group income protection and group critical illness insurance, although it is payable on group PMI, even if written as a long- term contract (as an anti-avoidance measure).

Chapter 1 Key points, page 1/14, Taxation – 2nd bullet pointAdd the following:

but long-term insurance policies such as group income protection are not.

Chapter 1, self-test question, page 1/16, Question 5Delete ‘purpose’ and replace with ‘tax advantage’.

www.dh.gov.uk/health/2012/06/act-explained/

2 IF7/December 2012 Healthcare insurance productsW

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Chapter 3, section A1A, page 3/3, final paragraphAmend as shown in bold type:

The ABI regularly reviews and updates (where necessary) its Statement of Best Practice (SoBP) for the Selling of Private Medical Insurance. The latest version was introduced in 2011 and includes common definitions (see chapter 8, appendix 2). Before the latest version was released, the ABI published a research brief…’

Chapter 4, section E, page 4/4, 3rd paragraphReplace the final sentence with the following:

The Dilnot Commission reported in July 2011 and made a number of recommendations essentially supporting a model of greater partnership between the individual and the state. The Government’s response in July 2012 was the White Paper ‘Caring for our future: reforming care and support’. Although this broadly supported the Dilnot recommendations, it deferred key decisions around extra funding. Until this is agreed and the insurance industry is confident of government policy going forward, it is unlikely that many long-term care insurance solutions will be developed.

Chapter 5, section C1, page 5/11, 2nd paragraphAdd the words shown in bold text:

Until 21 December 2012, the sex of the customer may also be taken into account but after that date it may not (on individual policies).

Chapter 6, section C4K, page 6/9, 2nd bullet pointAdd ‘on individual policies’ at the end of the first sentence.

Chapter 8, section A, page 8/2ABI codes of practicePlease note that the latest version of the ABI Statement of Best Practice was launched in 2011 – see appendix 8.2.

Chapter 8, section B1A, page 8/5, 1st paragraphAmend the first sentence to read

‘As mentioned in section A, the ABI produces…was last updated in 2011.’

Chapter 8, section B1A, page 8/5, 3rd paragraphDelete the final sentence.

Chapter 8, Self-test questions, page 8/13, Question 6Add ‘before it is sent’ to the end of the question.

Appendices to chapter 3, 6 and 8The following pages contain updated appendices 3.1, 6.1, 8.1 and 8.2.

Chapter 1Web update 02 3

Web updateAppendix 3.1: Extract from an individual policy schedule

of benefits

1. Example of AXA PPP healthcare Personal Policy core PMI product range benefits tables (Aug 2012)

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Appendix 3.1: Extract from an individual policy schedule of benefits

2. Example of the AXA PPP healthcare Health Select Modular Personal Policy PMI benefit tables (Aug 2012)


Web updateAppendix 3.1: Extract from an individual policy schedule

of benefits

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Appendix 3.1: Extract from an individual policy schedule of benefits

3. Example of the AXA PPP healthcare Corporate Health Plan PMI product range (Aug 2012)


Web updateAppe Appendix 3.1: Extract from an individual policy

schedule of benefits ndix 3.1

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Preferential Private Health CoverApplication for personal cover

1 About you

2 About your family

About this form

n Please take time to read this form carefully, making sure you have fully completed ALL the sections.

n It is important that you select one method of applying for cover (section 7) and that you sign and date the relevant declaration.

n Please write in blue or black ink and use BLoCK CAPITALS.

n If you need any assistance please call our helpline on 0800 197 6997. We are here to help. Your calls may be recorded and monitored for training and quality assurance purposes.

You may include a spouse or partner under the age of 75, and unmarried dependent children under the age of 21, or under 24 if they are in full-time education. Everyone enrolled in the policy must be resident in the UK, Channel Islands or Isle of Man.

To apply for Preferential Private Health Cover you must be under the age of 75 and be resident in the UK, Channel Islands or Isle of Man.

If you have any questions, please call the helpline on 0800 197 6997. We are here to help. 1

Title

If you, or a member of your family, are already a Simplyhealth member please tell us the registration/policy number

Address

Postcode

Date of birth

Forenames

Surname

Daytime telephone no.

Email address

Mobile telephone no.

Preferred contact time, between 8am and 6pm

Occupation

M MD D Y Y Y Y

Title Forenames Surname Relationship to you Date of birth

M MD D Y Y Y Y

M MD D Y Y Y Y

M MD D Y Y Y Y

M MD D Y Y Y Y

M MD D Y Y Y Y

M MD D Y Y Y Y

M MD D Y Y Y Y

M MD D Y Y Y Y

PPreferential

Appendix 6.1: Example application form for individual PMI


Web updateAppendix 6.1: Example application form for individual PMI

2 If you have any questions, please call the helpline on 0800 197 6997. We are here to help.

Preferential Private Health Cover Application for personal cover

5 Payment methodYou may pay by cheque or direct debit.

If you wish to pay by cheque please do noT include it with this form, we will send you a payment request in due course. If paying by direct debit please complete the attached form.

How would you like to pay? Annually by cheque Annually by direct debit Monthly by direct debit

6 How we use information about youAs the Data Controller, we will store and process personal data in accordance with the Data Protection Act 1998 (DPA).

Simplyhealth will use information to provide our services, for assessment and analysis, for underwriting and claims handling, to improve our services, and to protect our interests.

Unless you ask us not to we may use your information to keep you informed by post, telephone, email or other means about products and services, which may be of interest to you.

We will keep information about you confidential. However we may give information about you and how you use our products to the following:

n Fraud prevention agencies and other organisations who may record, use and give out information to other insurers.

n People who provide a service to us or act as agents on the understanding that they will keep the information confidential.

n Anyone to whom we may transfer our rights and duties under this agreement.

n We may also give out information about you if we have a duty to do so (such as regulatory bodies), or if the law allows us to do so or if the person requesting the information has in our opinion, a legitimate interest in the disclosure.

Sensitive dataIn order to assess the terms of the contract of insurance, including any specific medical exclusions or administer claims we may collect data, including medical information, which the DPA defines as sensitive.

Medical information will be kept confidential and only disclosed to those involved in providing the patient’s treatment or care, including their General Practitioner or Dentist, or their agents. Only in exceptional circumstances will we disclose medical information to other third parties or family members, without the patient’s explicit consent.

If you have appointed an insurance broker or intermediary, we may disclose to them the personal information that they need to deal with your cover. Details of medical information will not be disclosed to the intermediary unless we have the specific consent of the patient.

Accuracy of personal informationTo help us ensure that your personal information remains accurate and up to date please inform us of any changes.

You have the right to see personal information, which is held by us. There may be a charge if you want to do this. For more details write to: The Data Protection Co-ordinator, Simplyhealth, James Tudor House, 90 Victoria Street, Bristol BS1 6DF.

Your calls may be recorded and monitored for training and quality assurance purposes.

Agreeing to pay an excess can reduce your premiums. Please refer to our Policy Document and tick 4 one of the following, if required:

4 optional excess Level 1: Level 2: Level 3: Level 4: Save 8% Save 15% Save 30% Save 40%

3 Scale of cover Please refer to our careforyou brochure, Policy Document and Hospital Directory then tick 4 one of the following:

Scale A Scale B Scale C Scale D

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Today’s date



Section 7.1 Moratorium - no medical assessment

DeclarationPlease only complete this section if you have chosen to be underwritten using our moratorium option. Please read the following declaration carefully then sign and date it below.

n I have received and read the leaflet Underwriting explained. I understand that Simplyhealth will not cover any condition for which I, or my family members, have received advice, medication, tests or treatment, or was aware of, or might reasonably have been aware of during the five years immediately before the commencement of cover.

However, provided I, or my family members included in the policy, do not have symptoms, or receive treatment, medication, tests and advice (from a GP or a Specialist) for that condition for a continuous period of two years after the policy starts, then the condition will become eligible for benefit subject to the terms and benefits of Preferential Private Health Cover. This two year period is known as the Moratorium.

n I apply for Preferential Private Health Cover together with any family members detailed in section 2.

n I have received a copy of the Policy Document and have read or had read to me and agree to be bound by the Terms and Conditions of Preferential Private Health Cover.

n I declare that I have authority to give Simplyhealth information about my family members referred to in this application and where necessary, I have checked with them that the information I have provided is correct.

n I declare that, to the best of my knowledge, the information I have provided on this form is complete and accurate and that it contains all the information required for the underwriting option I have selected.

n By agreeing to the Preferential Private Health Cover Terms and Conditions I consent to any personal data, including medical information, that you may collect about myself and my family members, being processed by Simplyhealth. Where I am applying for cover for unmarried dependent children aged 16 or over I confirm I have their authority to consent to their personal data being processed by Simplyhealth on their behalf.

n We may use your information to keep you informed by post, telephone, email or other means about products and services, which may be of interest to you. If you do not wish your information to be used for these purposes please tick 4 box.

n I agree that this declaration, and the answers given on this application form, shall form the basis of the contract of insurance between me and Simplyhealth.

Your signature 7

In choosing this option there is no need to provide any medical history.

Please be aware that we will not be able to cover any pre-existing conditions that have occurred during the last five years. However if you, or your family members, remain free from any symptoms, treatment, medication or advice for a pre-existing condition, or any related condition, for two consecutive years after joining (the Moratorium period) we will reinstate cover, subject to the policy Terms and Conditions.

It is important to realise that you will probably never be covered for conditions requiring regular or periodic treatment. This is because each time you need treatment the Moratorium period starts again. It is therefore unlikely that there will be two consecutive years when you will be free from symptoms, treatment, advice or medication.

Please do not delay in seeking medical advice simply to get cover.

option 1 Moratorium - no medical assessment

Alternatively, you can choose to complete the medical assessment. With this option you, and any family members you wish to include in the policy, will need to complete the full medical questionnaire overleaf. It is important that you give all the information you are asked for as any disease or condition of health, which existed before the start of your policy will not qualify for benefit unless it has been fully disclosed and accepted by us. We will use the information provided to decide if there are any pre-existing conditions that are likely to need treatment in the future. We will write to you with details of any specific medical conditions that are excluded from the policy due to personal medical history. These will be detailed on your Membership Certificate.

option 2 Full medical assessment

7 Applying for coverPlease read all of the following section carefully before selecting eITHer option 1 or option 2.

You have a choice of two ways of applying for cover, involving different levels of medical information. We have produced a leaflet, Underwriting explained, to help you apply for cover and decide which is the best underwriting option for you. Before deciding which underwriting option you require please read the leaflet. If you do not have a copy or need assistance please call our helpline on 0800 197 6997.

Please indicate your choice by selecting one of the following:

or

I/We wish to apply for cover by signing the Moratorium statement and declaration (tick 4 box) Please read and complete the declaration in section 7.1.

I/We wish to apply for cover by completing the full medical assessment (tick 4 box) Please read and complete the declaration in section 7.2.

M MD D Y Y Y Y

Please complete the direct debit form on page 7





Section 7.2 Full medical assessmentPlease only complete this section if you have chosen to apply using our full medical assessment option.

Please help us by answering all the following four questions fully, accurately and honestly, for yourself and each family member you wish to include in your policy. If you are unsure whether something is relevant please tell us anyway.

It is important that you inform us, before your policy starts, of any existing medical conditions. Under the Terms and Conditions of the policy you will not qualify for benefit unless you have informed us of any such conditions and we have agreed to cover them. If anyone to be insured experiences any change in the state of their health, or have any new disease or medical condition diagnosed before the policy starts then again, you must tell us.

You must tick Yes or no to each of the following questions. Should you answer Yes to any of them please provide full details on the form below, using a continuation sheet if necessary. If there are any other conditions you believe we should be aware of please provide details separately. You do not need to inform us about genetic tests.

1. GP visits in the last year

In the last year has anyone to be insured visited a GP for any reason? (Tick 4 box)

Please detail each specific medical condition/symptom as we are unable to accept generic terms such as “minor or general ailments” or “normal childhood illnesses” etc. You may need to give us further information in the next section of this form if your GP has referred you for treatment/consultation.

Yes No

Describe the symptoms/ medical condition

What diagnosis was given?

What treatment or advice was received and when?

Patient’s name

Is further treatment, consultation or monitoring required? Please give details.

Is recovery complete? (tick 4 box) Yes No




Patient’s name



When were symptoms first experienced?

When was medical advice first sought?

M MD D Y Y Y Y

M MD D Y Y Y Y



M MD D Y Y Y Y

M MD D Y Y Y Y



M MD D Y Y Y Y

M MD D Y Y Y Y



M MD D Y Y Y Y

M MD D Y Y Y Y




Patient’s name






Patient’s name



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2. Hospital visits/specialist consultations in the last five years

In the last five years has anyone to be insured been in hospital or other medical establishment (either as an in-patient or an out-patient), had an operation or surgery, had tests such as x-rays or scans, or consulted a specialist, physiotherapist or other form of therapist? (Tick 4 box)

Yes No




Patient’s name






Patient’s name





M MD D Y Y Y Y

M MD D Y Y Y Y



M MD D Y Y Y Y

M MD D Y Y Y Y

3. other medical conditions

Please advise us if anyone to be insured has ever suffered from any psychiatric disorders, cancer, heart or orthopaedic conditions? (Tick 4 box)

Is anyone to be insured aware of any medical condition, symptom or physical defect they have for which medical advice has not been sought or any other medical condition which you consider we should be made aware of? (Tick 4 box)

Yes No

Yes No




Patient’s name






Patient’s name





M MD D Y Y Y Y

M MD D Y Y Y Y



M MD D Y Y Y Y

M MD D Y Y Y Y





DeclarationPlease only complete this section if you have chosen to be underwritten using our full medical assessment option. Please read the following declaration carefully, both you and any spouse/partner included in the application should sign and date it below.

n I have received and read the leaflet Underwriting explained.

n I apply for Preferential Private Health Cover together with any family members detailed in section 2.

n I have received a copy of the Policy Document and have read or had read to me and agree to be bound by the Terms and Conditions of Preferential Private Health Cover.

n I declare that I have authority to give Simplyhealth information about my family members referred to in this application and where necessary, I have checked with them that the information I have provided is correct.

n I declare that, to the best of my knowledge, the information I have provided on this form is complete and accurate and that it contains all the information required for the underwriting option I have selected.

n I understand that the Membership Certificate, which I will receive from Simplyhealth, will advise me of any medical conditions specifically excluded from my cover because of the information I have supplied.

n By agreeing to the Preferential Private Health Cover Terms and Conditions I consent to any personal data, including medical information, that you may collect about myself and my family members, being processed by Simplyhealth. Where I am applying for cover for unmarried dependent children aged 16 or over I confirm I have their authority to consent to their personal data being processed by Simplyhealth on their behalf.

n We may use your information to keep you informed by post, telephone, email or other means about products and services, which may be of interest to you. If you do not wish your information to be used for these purposes please tick 4 box.

n I agree that this declaration, and the answers given on this application form, shall form the basis of the contract of insurance between me and Simplyhealth.

Please complete the direct debit form opposite

Your signature

Signature of spouse/partner if they are to be included 7

Today’s date M MD D Y Y Y Y

Today’s date M MD D Y Y Y Y

4. Dental treatment

In the last year has anyone to be insured received treatment from a dentist/hygienist other than for routine appointments or routine treatment such as fillings, extractions or scale and polish? (Tick 4 box)

In addition, in the last five years has anyone to be insured had any wisdom teeth problems? (Tick 4 box)

Yes No

Yes No

Describe the symptoms/dental condition



Patient’s name



Describe the symptoms/dental condition



Patient’s name

If wisdom teeth problems have been experienced,have all four wisdom teeth been removed? (tick 4 box)

Yes No



If wisdom teeth problems have been experienced,have all four wisdom teeth been removed? (tick 4 box)

Yes No



M MD D Y Y Y Y

M MD D Y Y Y Y



M MD D Y Y Y Y

M MD D Y Y Y Y

7

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7

Simplyhealth official use only. This is not part of the Instruction to your Bank or Building Society. Please complete all relevant sections.

Day of the month on which you’d like the Direct Debit to be collected from your account

If premiums are to be paid by a party other than the policy holder please complete the boxes below. This information will only be used by Simplyhealth.

The Direct Debit Guarantee

n This Guarantee is offered by all banks and building societies that accept instructions to pay Direct Debits.

n If there are any changes to the amount, date or frequency of your Direct Debit Simplyhealth will notify you 10 working days in advance of your account being debited or as otherwise agreed. If you request Simplyhealth to collect a payment, confirmation of the amount and date will be given to you at the time of the request.

n If an error is made in the payment of your Direct Debit, by Simplyhealth or your bank or building society you are entitled to a full and immediate refund of the amount paid from your bank or building society – If you receive a refund you are not entitled to, you must pay it back when Simplyhealth asks you to.

n You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify us.

!

Service user number

6 9 5 4 9 1

Bank/building society account number

Reference

Branch sort code

Name(s) of account holder(s)

Name and full postal address of your bank or building society

To the Manager Bank/Building Society

Address

Postcode

Name

Address

Telephone no.

Instruction to your bank or building society

Please pay Simplyhealth Direct Debits from the account detailed in this instruction subject to the safeguards assured by the Direct Debit Guarantee.

I understand that this instruction may remain with Simplyhealth and, if so, details will be passed electronically to my Bank or Building Society.

Signatures

Date

Bank and Building Societies may not accept Direct Debit instructions from some types of account.

SimplyhealthJames Tudor House90 Victoria StreetBristol BS1 6DF

Instruction to your Bank or Building Society to pay by Direct Debit

Please fill in the whole form including official use box using a ball point pen and send it to:

This guarantee should be detached and retained by the payer.



Simplyhealth, James Tudor House, 90 Victoria Street, Bristol BS1 6DF

Simplyhealth is a trading name of Simplyhealth Access, registered and incorporated in England and Wales, No.183035. Registered office: Hambleden House, Waterloo Court, Andover, Hampshire, SP10 1LQ. Authorised and regulated by the Financial Services Authority. Your calls may be recorded and monitored for training and quality assurance purposes.

PREF008/1009

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Appendix 8.1: ABI Consumer Guide to PMI

Are You Buying Private Medical Insurance?

Take a look at this guide before you decide

2012


Web updateAppendix 8.1: ABI Consumer Guide to PMI

3ARE YOU BUYING PRIVATE MEDICAL INSURANCE?

Contents

About this guide 4

Understanding what you are buying 4

What is private medical insurance? 6

How do I buy private medical insurance? 7

Will I need to give details about my health? 8

How do I choose the right cover? 9

What is and is not covered? 11

What if I have a disability? 12

Will my premiums (payments) increase over time? 12

What if I want to change to a new insurer? 13

What do I need to remember? 14

What protection do I have? 15

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2.

3.

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6.

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4 ARE YOU BUYING PRIVATE MEDICAL INSURANCE?

1. About this guide

This guide is for individuals who are thinking about buying private medical insurance (PMI). If you get PMI as a benefit through your employer, your employer will have all the information about your insurance cover which may be different from the general information detailed in this guide for individuals purchasing PMI, for example the cooling-off period will not apply if your employer has purchased the insurance for you.

We have designed this guide to help you understand more about what PMI in the UK is, why people buy it, and how it works, so that you will be able to make an informed choice before you buy a policy.

We publish this guide on behalf of all insurers who offer PMI, whether they are our members or not. The ABI is the recognised trade association that represents insurance companies working in the UK. Our members account for some 90% of premiums in the UK.

As well as this guide, the information you receive from PMI companies will tell you more about the products that you are considering buying. They outline what is, and is not, covered. Remember that products from different companies will vary. If you have any questions, your financial adviser or insurance company will be able to answer them.

Buying private medical insurance is similar to buying any other type of insurance policy.

Private medical insurance is available in a range of different cover levels at different premium levels designed to meet the needs of different customers. For example, you can have choices around the types of treatment covered, what cover level will apply to those treatments, where treatment is provided, and the contribution you might be willing to make to the treatment cost (the excess). Take the time to understand the cover available to you to help you make an informed choice.

2. Understanding what you are buying




To make sure that you understand what you are covered for and the limits that will apply if you make a claim, read the policy terms and conditions. You should contact the insurer who will be happy to talk you through the cover available to you.

For example, you might want to know:

•Are there monetary limits on the policy – how much of the cost of a treatment, or course of treatments, do you want covered?

•How does an excess work – will it be applied per claim or per policy year?

•What cover is there for cancer – what treatments are covered and for which stages of the disease?

•Is there a no claims discount – what will happen to my next premium if I make a claim?

There can be limits on cover for drug treatments. You might want to ask about these. A drug treatment that your insurer has covered might not be available on the NHS when

your insurance cover ends. Your insurer will contact you as you approach the end of cover about the options available to you so you can discuss it with your specialist.

These could be:

•Return to the NHS and receive the treatment there, if available

•Return to the NHS and receive alternative treatment

•Pay for the treatment privately on a self-pay basis.

Don’t confuse private medical insurance with other types of insurance

Private medical insurance is often called ‘health insurance’, and can sometimes be confused with other types of insurance such as health cash plans, income protection and critical illness. We publish guides on these types of insurance if you’d like to know more.

You should:

• compare the benefits of each insurer;

• compare any cover limits or monetary amounts;

• consider your own health requirements; and

• ask questions about how the cover works.

If your employer has purchased the cover on your behalf, they will have made these decisions for you.

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Private medical insurance is designed to cover the cost of private medical treatment for ‘acute conditions’ that start after your policy begins.

An acute condition is a disease, illness or injury that is likely to respond quickly to treatment that aims to return you to the state of health you were in immediately before suffering the disease, illness or injury, or which leads to your full recovery. Your insurer can tell you about their cover for this and whether or not they will provide any cover for longer-term conditions (typically referred to as chronic conditions). A chronic condition is a disease, illness, or injury that has one or more of the following characteristics: it needs long-term monitoring, control or relief of symptoms, it requires rehabilitation, it continues indefinitely, and it has no known cure or is likely to come back.

PMI is designed to work alongside not to replace all the services offered by the NHS and in all cases customers retain their right to use the NHS. Some policies may cover certain types of, or elements of, long-term treatment or treatment for chronic conditions, but this is not usually the main purpose of PMI.

Why buy private medical insurance?

People buy this type of insurance to have:

Timely access to healthcare

•Prompt referral to a consultant

•Quick admission to hospital

•Treatment at a convenient time

Choice of healthcare

•Direct care by a consultant

•Advanced treatment options

High-quality private clinic and hospital accommodation •Privacy of an en-suite room

•Home amenities such as TV

•Comfort and cleanliness

In addition, PMI can pay you a cash benefit when you choose to use the NHS instead of having private treatment.

3. What is private medical insurance?




4. How do I buy private medical insurance?

How does private medical insurance work?

Although policies can be different, medical treatment usually has to start with a referral by your GP for specialist treatment. Before you arrange any private treatment, you should call your insurance company to check that you are covered for the treatment.

Stay in touch with your insurer at each stage of your treatment. Your insurer will confirm if you are covered. It is likely that treatments for some illnesses, including pre-existing conditions (conditions from which you are already suffering, or have already had before your policy started) will not be covered by a private medical insurance policy (see section 5 of this guide).

Private medical insurance is provided only by insurers and may be bought:

•direct from the insurer;

•through an independent adviser; or

•through an agent (bank, building society or retail outlet, such as a supermarket)

You can apply for insurance:

•overthephone;•usingtheinternet;or •face-to-face;•bypost.

The method of application may vary by insurer. If you’re using the internet, try searching under ‘health insurance’ as well as ‘medical insurance’.

An insurer, or a tied agent who sells policies on an insurer’s behalf, is only able to discuss that insurer’s own policies. An independent adviser offers policies from a range of insurers.

Independent advisers give you recommendations after assessing your needs. They are responsible to you for the advice they give. If you buy direct from an insurer or an insurer’s agent they will also assess your needs. But, they can only give

you advice on which of their own policies best suits you.

Your adviser must explain whether they are:

•independent;

•advising on a range of insurers; or

•a representative of one insurer.

If you buy direct from an insurer or insurer’s agent without receiving advice, it is your responsibility to choose a policy that is right for you.

You will be asked to fill in an application, and may be asked for information about your health. Your application, or any declaration you make to your insurer, is very important. In fact, it forms the basis of your contract with your insurer. You must answer any questions you are asked as fully and as accurately as you can, to the best of your knowledge and belief. If you don’t, your insurer may refuse to pay your claim and could cancel your policy. If you are unsure whether something is important, you should disclose it.

Once your application has been accepted you will be told when cover will start.

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Cancellation period

Your insurer will send you policy documents when your policy has been set up. You have at least 14 days from the day you receive them to decide whether the product is suitable for you. This is commonly known as a ‘cooling-off period’. If you want to cancel

your policy, you must do so within the stated period and tell the insurer that you want to cancel your cover. If you have made any payments you will usually receive a full refund unless you have made a claim.

5. Will I need to give details about my health?

You won’t normally be covered for any illnesses you are currently suffering from, or have already had. These are known as ‘pre-existing conditions’. You must answer all questions as fully and as accurately as you can, to the best of your knowledge and belief.

There are two main methods that PMI companies use to deal with your application for cover. These are:

•full medical underwriting; or

•moratorium underwriting.

All PMI companies will offer you the full medical underwriting option. Only some companies offer the moratorium option.

Full medical underwriting (medical history declaration)

You are asked to give details of your medical history. The insurer may write to your doctor for more information, but they do not do so in every case. You must give all the information you are asked for. If you

don’t, your insurer may refuse to pay any claim that you make in the future, or may cancel your policy.

If you are not sure whether to mention something, it is best to do so. If you have a medical condition that is likely to come back, the insurer will issue a policy, but that condition (and any related to it) might not be covered. This condition may never be covered, or not covered for a set period of time.

Moratorium underwriting

You are not asked to give details of your medical history. Instead, the insurer does not cover treatment for any medical condition that you have received treatment for, taken medication for, asked advice on or had symptoms of. In other words, you will not be covered for any condition that existed in the past few years. Five years is the usual time period.




6. How do I choose the right cover?

These conditions may automatically become eligible for cover. But this will only happen when you do not have symptoms of, or receive treatment, medication, tests and advice (from your GP, a healthcare professional or a specialist) for that condition, or a related condition, usually for a continuous period of two years after your policy has started.

You do not need to tell the insurer about your medical history when you take out the policy. If you claim, however, your insurer might ask for medical notes that are needed to decide if your claim can be covered.

There are some conditions, for example chronic conditions, that will probably never be covered. This is because you will always need treatment, medication, tests or advice for them. You should not delay getting medical advice or treatment, simply to get cover under the moratorium terms.

Your insurer will give you information explaining how their moratorium works. You may also want to ask the insurer or adviser, to explain this.

You should check to see if you already have PMI cover. Some employers include PMI as part of their benefits package. Even a club or professional organisation might have arrangements to offer you (and your family members) cover.

If this is not the case and you want to take out cover yourself, you need to think about what benefits are most important to you. You will need to decide what sort of cover you want. There are a number of things you will have to consider:

•How much do you want to spend?

•Are you prepared to pay for part of your treatment?

•Do you want your cover to include seeing a specialist and having diagnostic tests (for example, X-rays and blood tests) as an outpatient?

•Do you want a choice of hospitals, or would you be happy to have any treatment that you might need, in a hospital available from a limited range chosen by your insurance company?

•What are you not covered for?

The answers you give to questions such as these could have a significant effect on how much you pay (see section 9). The more your cover includes, the higher your premiums are likely to be. There are different sorts of policies, from low cost, offering limited cover, to those that offer wide-ranging cover and benefits. Most policies offer cover for inpatient and day patient treatment, but not always outpatient treatment and diagnostic tests.

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How you receive treatment falls into one of three categories.

OutpatientA patient who attends a hospital, consulting room, or outpatient clinic and is not admitted as a day patient or inpatient.

Day patientA patient who is admitted to a hospital or day patient unit because they need a period of medically supervised recovery but does not stay in a bed overnight.

InpatientA patient who is admitted to hospital and who stays in a bed overnight or longer, for medical reasons.

The following diagram is an example of how you might get private treatment.

Visit your GP Your GP needs to refer you for investigations or treatment.

Follow-up visit Specialist consultation and a review of your treatment.

GP refers you for specialist treatment

This usually includes initial consultations and diagnostic tests.

Your specialist needs to refer you to hospital for more investigations or treatment.

Hospital

This may be a private hospital or private facilities within an NHS hospital.

After leaving hospital you will usually have a follow-up visit to your specialist.

Outpatienttreatment

Inpatient orDay patienttreatment

Outpatienttreatment

Call your insurance company to check that you are covered for the treatment, specialist and hospital.

Start to Claim

If your policy includes outpatient treatment and your claim is eligible, you can claim after your GP has referred you to a specialist. Stay in touch with your insurer at each stage of your treatment.




7. What is and is not covered?

What your PMI might cover

Sometimesincluded (as part of the policy or if you ask for it)

Outpatienttests

Outpatient consultations and treatment with a specialist

Usuallyincluded

Inpatienttests

Hospital accommodation and nursing care

Therapy, for example, physiotherapy and complementary therapy

Surgery as an inpatient or day patient

Cash payment to the customer for treatment received as an NHS inpatient

Remember, private medical insurance is designed to cover treatment for curable, short-term illness or injury. These are commonly called ‘acute conditions’. Some illnesses and treatments are rarely covered.

Private medical insurance isn’t designed to cover the long-term treatment of chronic conditions for a number of reasons.

• The private-hospital sector’s main purpose is to treat conditions that can be cured, or mostly cured, quickly.

•AlargepartoftheNHS’sfundingistocare for patients with long-term conditions.

So, for example, patients with diabetes can go to clinics, be regularly monitored and have their insulin needs met. This will often happen locally, in a primary-care setting such as their GP surgery.

As well as the practical reasons mentioned above, insurers also have to balance how much cover they provide with what you are willing to pay for that cover. So, insurers do not usually cover the treatment of long-term (chronic) conditions. This is because their premiums would become too expensive for most people.

The following conditions or treatments are normally not included in your cover.

•Going to a general practitioner (GP)

•GoingtoAccidentandEmergency

•Drugabuse

•HIV/AIDS

•Normalpregnancy

•Genderreassignment(sexchange)

•Mobilityaids,suchaswheelchairs

•Organtransplant

•Injuriesyougetfromdangeroushobbies (often called hazardous pursuits)

•Conditions you had before taking outthe insurance (commonly known as pre-existing conditions – see section 5)

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9. Will my premiums (payments) increase over time?

Even with the wide range of PMI policies available, it is likely that whatever policy you choose your premiums will rise above the rate of general inflation.

The cost of healthcare will increase for a number of reasons:

•As methods used to diagnose conditions become more advanced and are used more, doctors are able to identify some conditions earlier and patients can be treated more quickly; and

•As new drugs, such as those for the treatment of cancer, become available; and

•As the technology used in surgery becomes more advanced.

PMI usually extends to cover new medical developments, as they become established medical practice. As you get older you are more likely to need treatment. Premiums usually increase with your age to reflect this. The graph below shows how premiums can increase with age. This is only an example and will vary depending on your insurer. You can always ask your insurer to give you advice.

You will not be refused cover because you have a disability. As with other pre-existing conditions, your insurer might not include cover for treatment that is needed because of your disability. However, the law requires that it must be reasonable and fair for them to do this.

If you sign a declaration about your medical history, you must give all relevant information about your disability. If your policy does not cover pre-existing conditions, an existing medical condition causing disability, or arising from it, will not be covered.

8. What if I have a disability?

•Long-termtreatmentandchronicconditions

•Dentalservices

•Prescriptiondrugsanddressings,afterleaving hospital or as an outpatient

•Deliberatelyself-inflictedinjuries

•Infertility

•Cosmetictreatment

•Experimentalorunproventreatment or drugs

•Kidneydialysis

•Warrisks

Your insurer will give you the terms and conditions of your policy at the point of sale or as soon as possible thereafter, but in any event before the conclusion of the contract. Your insurer may also give you a summary or Key Facts document either before or straight after your insurance contract starts. The summary of your policy or Key Facts document is designed to highlight any important or unusual limits of the policy, as well as the main monetary limits. Please read your full policy document as the summary or Key Facts will not explain the full policy terms and conditions.




Can I reduce my premiums?

You may be able to reduce your premiums by choosing from:

•a reduced level of benefits, such as limited outpatient cover;

•aspecificrangeofhospitals;

•anexcessonyourpolicy,whereyoupaythe first part, say £100, £200 or £500 of any treatment, either each policy year or each claim;

•apolicywith‘co-insurance’whereyou agree to pay a set percentage of any claim

and the insurer pays the balance until you have paid an agreed yearly amount (after this the insurer pays 100%);

•apolicythatoffersano-claimsdiscountor a discount that depends on your commitment to health, including exercising regularly and not smoking;

•havingtreatmentontheNHS,ifthisisavailable within a certain time, rather than in a private hospital; and

•receivingadiscountbychanginghow you pay.

Indexed price

35 40 45 50 55 60

Age

65 70 75

350

300

250

200

150

100

50

0

Comparative price by age

The indexed price is how much the price increases when compared to the price at age 35. So, the indexed price at age 35 is 100. When you are aged 70 it is around three times the price for someone aged 35.

You can change your PMI company. If you want to switch, there are four main things you need to consider.

Comparing your cover

Evenifyourpersonalmedicalexclusionsstaythe same with your new insurer, the overall cover is likely to be different.

You should:

•compare the benefits of each insurer;

•compare any cover limits or monetary amounts; and

•ask questions about how the cover works.

10. What if I want to change to a new insurer?

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•Before you change insurers you should check the benefits, policy terms and underwriting position carefully to understand the consequences. The cover offered may not be the same.

•Check that you have the cover that you think is important – remember you may well have a choice of options.

•You must give full and accurate information to your insurer or adviser. This will avoid your claim being refused or your policy being cancelled.

•You should read all the policy documents carefully, now and in the future. Keep all documents safe.

•You need to keep your payments up to date. If you don’t your cover will stop and only eligible treatment costs from before the cancellation date will be paid.

•You will be sent details of changes to benefits, rules or premiums before your renewal date. Your policy will not be cancelled just because you have claimed or your health has got worse.

11. What do I need to remember?

Paperwork

Paperwork varies from one company to another, but there’s likely to be an application form to sign and you might need to provide a copy of the policy certificate from your current insurer as proof of your current cover.

When you choose to switch

Usually, private medical insurance is offered through an annual contract. If you are thinking of switching to another insurer, it’s best to consider doing this at your renewal date. At any other time check if you will lose any payments.

Pre-existing conditions

Some insurers will keep your current personal exclusions (what is not included in your cover) which means any treatment for these conditions will be excluded from your new cover. They will not add any new ones. However, some insurers might not cover illnesses or injuries you have had in the recent past or any condition that you suffer from now, even if these are covered by your current insurer.




12. What protection do I have?

Regulation

On 14 January 2005, the Financial Services Authority (FSA) started regulating private medical insurance policies and any advice you receive about them. These responsibilities are being taken over by the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA).

Complaints

All insurers and anyone else advising on private medical insurance, must have their own complaints procedures in place. They must also be covered by the Financial Ombudsman Service (FOS). This means that if you have a problem with any part of your cover, you should speak to your insurer or adviser first. If you are not happy with the way your complaint is handled, the FOS offers an independent service to help settle your dispute. This service is free. Website: www.financial-ombudsman.org.uk

Compensation

The Financial Services Compensation Scheme (FSCS) is the UK’s legal fund for customers of authorised financial services firms. The FSCS can pay compensation if a firm cannot, or is likely to be unable, to pay claims against it due to insolvency. The FSCS is an independent organisation, set up under the Financial Services and Markets Act 2000. Website: www.fscs.org.uk

Confidentiality

By law, specifically the Data Protection Act 1998, all insurers have to treat sensitive and personal information confidentially, especially medical details. When you are asked for information, you will be told what it will be used for, who it may be given to and in what circumstances. You can ask to see any information an insurer has about you. Totally anonymous statistical information is sometimes given to outside organisations, so they can carry out research. Insurers might use email to communicate with you. If you choose to communicate with your insurer in this way, you must make sure your email address is private and cannot be used or seen by anyone else.

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Association of British Insurers51 Gresham StreetLondonEC2V7HQPhone: 020 7600 3333Fax: 020 7696 8999Email:[email protected] www.abi.org.uk


Web updateAppendix 8.2: ABI Statement of Best Practice for the

Selling of Private Medical Insurance Cover

Association of British Insurers

Statement of Best Practice

for Sales of

Individual and Group Private Medical Insurance

September 2011

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Appendix 8.2: ABI Statement of Best Practice for the Selling of Private Medical Insurance Cover

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Introduction

This Statement of Best Practice applies to ABI members selling private medical insurance (PMI) to UK residents that covers private treatment in the UK. It is designed to help make sure that people can make the right choice about which plan will suit their needs. It aims to help people:

Get clear, timely information about policies they are considering

Understand the extent and limitations of cover under the policies they are considering

Compare key aspects of the cover offered by different insurers

Choose the best underwriting approach and policy for their needs This Statement covers individual, and group (including corporate) private medical insurance schemes. It requires insurers to:

Use common definitions for specific terms.

Use standard examples to explain the scope of cover. The examples about cancer were originally developed with Cancerbackup, now part of Macmillan Cancer Support, and we gratefully acknowledge their ongoing contribution.

Make information available to individual and group applicants, or the intermediary, if there is one.

Private medical insurers are required to comply with all UK and EU legislation. They are also regulated by the Financial Services Authority. All information insurers provide must be clear, fair and not misleading. This Statement builds on the existing legislation and regulations to cover the specific information needs of people considering private medical insurance. This Statement is in addition to (and, in the event of a conflict, is overruled by) any regulatory or legal requirements and is mandatory for all private medical insurers that are ABI members. It can therefore be taken into account by the Financial Ombudsman Service in considering any complaints about private medical insurance. This Statement supersedes and replaces all previous editions. Members should implement the revised Statement as soon as possible, but in any event within eighteen months, as necessary to accommodate IT updates and publication cycles. The Association of British Insurers (ABI) is the trade association for the UK insurance industry. The ABI is the voice of insurance, representing the general insurance, investment and long-term savings industry. It was formed in 1985 to represent the whole of the industry and today has over 300 members, accounting for some 90% of premiums in the UK.




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Contents 1 About Private Medical Insurance 3

2 What insurers are required to do 3 3 Principles 6 Annexes A Common definitions 9 B Templates for setting out key information about PMI 11

B.1 Explaining the choice of underwriting – individual policies and 11 underwritten group schemes

B.2 Explaining the cover for long-term treatment / chronic conditions 15 – individual policies and group schemes

B.3 Explaining the cover for cancer – individual policies and group schemes 19

B.4 Explaining the cover for drug treatment – individual policies and group 23

schemes C What people are required to disclose and their rights 24 D Group (including Corporate) schemes – roles and responsibilities 25

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1 About Private Medical Insurance 1.1 Private medical insurance (PMI) aims to cover the costs of private medical treatment

for ‘acute conditions’ that start after the policy begins. The ABI defines an acute condition as follows:

A disease, illness or injury that is likely to respond quickly to treatment which: aims to return the claimant to the state of health they were in immediately before

suffering the disease, illness or injury, or which leads to a full recovery.

Please note:

PMI is designed to work alongside, not to replace, all the services offered by the NHS and in all cases customers retain their right to use the NHS. Some policies may cover certain types of treatment for, or elements of, chronic conditions, but this is not usually the main purpose of PMI.

Types of PMI

1.2 The type of PMI depends on who the policyholder is. The policyholder is the person

with whom the contract for the policy is made, who takes out the policy and pays the premiums.

Individual PMI – where the policyholder is an individual. The policy covers the policyholder and may also cover their family.

Group (including Corporate) PMI – where the policyholder is a legal entity, usually an employer. The policy covers the scheme members (usually employees and sometimes their families). It is the person representing the employer (not the insurer) who chooses the scope of the cover and how any information about the policy is made available to their employees.

Please note:

Any policyholder is free to decide to be represented by a third party acting as an intermediary – for example, a firm of independent financial advisers, a specialist health insurance intermediary, or employee benefit consultants.

Individuals and members of a group scheme can have an unresolved complaint referred to the Financial Ombudsman Service.

2 What insurers are required to do

Legislation 2.1 Private medical insurers are already required to comply with all UK and EU

legislation, including on the following:

Marketing and promotional material

Unfair contract terms




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Anti-discrimination on age, disability, gender, race, ethnic origin, faith, sexual orientation and political beliefs

Client confidentiality and data protection

Contract structures

Allowing customers to change their mind, and

Competition

Regulation

2.2 Private medical insurers are also regulated by the Financial Services Authority requiring them, amongst other things, to follow eleven principles:

1. Integrity - Conduct business with integrity.

2. Skill, care and diligence - Conduct business with due skill, care and diligence.

3. Management & Control - Take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.

4. Financial prudence - Maintain adequate financial resources.

5. Market conduct - Observe proper standards of market conduct.

6. Customers’ Interests - Pay due regards to the interests of customers and treat them fairly.

7. Communication with clients - Pay due regard to the information needs of clients, and communicate information to them in a way that which is clear, fair and not misleading.

8. Conflicts of interest - Manage conflicts of interest fairly, both between our customers and ourselves and between a customer and another client.

9. Customer: relationships of trust - Take reasonable care to ensure the suitability of advice and discretionary decisions for any customer who is entitled to rely upon its judgement.

10. Clients’ assets - Arrange adequate protection for clients’ assets when it is responsible for them.

11. Relation with regulators - Deal with its regulators in an open co-operative way, and must disclose to the FSA appropriately anything relating to the firm of which the FSA would reasonably expect notice.

2.3 In accordance with Principle 7, where a policy summary is provided, FSA regulation

requires an overview of the policy without overloading the customer with detail and for the policy summary to contain only the following information:

Key facts logo

Statement that the policy summary does not contain the full terms of the policy, which can be found in the policy document

Name of the insurance undertaking

Type of insurance and cover

Significant features and benefits

Significant or unusual exclusions or limitations, not limited to:

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o Deferred payment periods

o Exclusion of certain conditions, diseases or pre-existing medical conditions

o Moratorium periods

o Limits on the amounts of cover

o Limits on the period for which benefits will be paid

o Restrictions on eligibility to claim such as age, residence or employment status

o Excesses

o Limits on the cover in terms of where treatment may be obtained, or any requirement for approval before treatment is begun

Duration of the policy.

A statement, where relevant, that the customer may need to review and update the cover periodically to ensure it remains adequate.

Price information (optional).

Existence and duration of the right of cancellation (other details may be included).

Contact details for notifying a claim.

How to complain to the insurance undertaking and complaints may subsequently be referred to the Financial Ombudsman Service (or other applicable named complaints scheme).

That, should the insurance undertaking be unable to meet its liabilities, the customer may be entitled to compensation from the compensation scheme (or other applicable compensation scheme), or that there is no compensation scheme. Information on the extent and level of cover and how further information can be obtained is optional.

Any cross-references to the relevant policy document provisions, must be in addition to the policy summary and only contain information that is in the policy document.

This Statement of Best Practice

2.4 This Statement builds on existing legislation and regulations to cover the specific

information needs of individual or group/corporate customers who are deciding whether or not to purchase PMI, are choosing between PMI policies, or having recently taken out cover are in their cooling-off period.

To do this, in addition to meeting all the legislative and regulatory requirements, including those above, this Statement requires insurers to do all of the following:

1. Comply with the principles set out in this Statement in section 3 below including:

Make the required information available to individual and group scheme policyholders as set out in Principle 4.

Use the common definitions set out in the Annex A wherever they apply to help customers understand their cover and compare policies. This means that, these terms have the same meaning in all PMI policies.

Make the information as set out in the Annex B available to potential customers so they can make a rational buying decision:




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o Give customers a clear explanation of the underwriting choices available and how each option works as set out in the Annex B.1.

o Explain the cover, if any, for long-term treatment or chronic conditions as set out in the Annex B.2.

o Have a separate section to explain the cover, if any, for cancer as set out in the Annex B.3.

o Explain the cover, if any, for drugs as set out in the Annex B.4. 2. Use the templates as set out in the Annex B to set out information so that

customers can compare policies they are considering and make a rational buying decision.

3. Use the relevant standard examples as set out in the Annex B to explain the scope of cover provided.

4. Inform people what information they need to disclose and their rights to ensure that the contract is set up on a fair basis as set out in the Annex C.

2.5 Insurers will make all the mandated documents described in this Statement available to individual and group applicants, either directly or through the intermediary, if there is one. The information prepared by insurers for the policyholder (and in the case of group PMI, for employees) will comply with this Statement.

3 Principles PMI insurers must ensure that their business complies with the following ABI

principles:

Principle 1 The ABI PMI common definitions must be used in all policy documents, where those words apply.

Principle 2 For individual customers it is the insurer’s responsibility to work with

any intermediary to ensure that each customer receives all of the mandated documentation described in this Statement.

For group business it is in the interest of the insurer for individual members of group/corporate schemes to know what cover they have. Insurers will make information available to the employer (the group customer) or the intermediary, if there is one.1 It is the employer’s responsibility to give the information to scheme members. All information provided by the insurer, for the employer to give to their employees, will comply with the requirements of this Statement. This will not affect the right of any individual member of a group/corporate scheme to take any complaint they might have to the Financial Ombudsman Service.

Principle 3 Insurers must provide explanations of core terms and conditions that

are appropriate to the customer’s circumstances and that are clear and in plain and intelligible language, to explain the details of cover.

1 FSA ICOBS 6.1.12G – The firm should tell the employer to pass the information on to the employee.

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In particular:

a) What treatment is and is not covered by the policy including significant exclusions, exclusions for pre-existing conditions and conditions related to pre-existing conditions, cancer, exacerbations of an ongoing condition, information around limits to cover, withdrawal of cover (including when the policy holder cancels, or stops paying the premium for, all or part of the policy) and the terms that may need to be applied for the customer to transition to the NHS.

b) Benefits and features including healthcare provider networks. c) Potential for there to be changes to the premium and/or policy

terms at renewal. d) Implications for cover when switching from one policy or insurer to

another including from a group scheme to an individual scheme. e) Any requirement for pre-authorisation before getting treatment. f) Processes including how to claim on, complain about and cancel

the policy. g) Where applicable, an explanation of moratorium underwriting,

including that underwriting is undertaken at point of claim, how regular check-ups affect the moratorium, and how symptoms affect cover where there is no diagnosis.

h) Where applicable, an explanation of full medical underwriting – including that underwriting is undertaken at point of application, how symptoms affect cover where there is no diagnosis.

i) Requirement to make full disclosure in response to insurer’s question, in particular on pre-existing conditions.

Principle 4 Insurers must provide the following information to individual

customers, and group scheme customers if applicable to the scheme, at the point of sale or as soon as possible thereafter, but in any event before the conclusion of the contract, including:

a) 'Are you buying PMI?' – the ABI consumer guide. b) 'Your underwriting options' - a clear explanation of the

underwriting options and what each option means. The explanation should meet the requirements set out in the annex A.

c) 'Your PMI Cover for treatment for long-term/chronic condition(s)' - the format is prescribed so customers can compare different companies cover and exclusions as set out in the Annex A.

d) Cover for cancer in a distinct section, using the prescribed headings and content of the Explanation of Cover for Cancer, separately from other conditions. The explanation should meet the requirements set out in the Annex A.

In addition, insurers must make this information available to customers by drawing it to their attention and telling them where it is, for example on the website, on the following occasions:

When there is a change to the terms and conditions




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When a new person is added to the policy, such as a spouse

As part of the renewal process

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Annexes A Common Definitions

Insurers must use the common definitions set out in this section where that word is used in policy documents (with the exception of those relating to international products). The common definitions are not designed to describe the scope of cover provided by a product. Their purpose is to ensure that in whatever context the defined word or phrases are used they will have the same meaning. Members may use additional information or support material to describe the extent, or otherwise, of cover provided. Acute condition A disease, illness or injury that is likely to respond quickly to treatment which aims to return you to the state of health you were in immediately before suffering the disease, illness or injury, or which leads to your full recovery. Cancer A malignant tumour, tissues or cells, characterised by the uncontrolled growth and spread of malignant cells and invasion of tissue. Chronic condition A disease, illness, or injury that has one or more of the following characteristics:

it needs ongoing or long-term monitoring through consultations, examinations, check-ups, and / or tests

it needs ongoing or long-term control or relief of symptoms

it requires your rehabilitation or for you to be specially trained to cope with it

it continues indefinitely

it has no known cure

it comes back or is likely to come back Day patient A patient who is admitted to a hospital or day patient unit because they need a period of medically supervised recovery but does not occupy a bed overnight. Diagnostic tests Investigations, such as X-rays or blood tests, to find or to help to find the cause of your symptoms. Inpatient A patient who is admitted to hospital and who occupies a bed overnight or longer, for medical reasons. Nurse A qualified nurse who is on the register of the Nursing and Midwifery Council (NMC) and holds a valid NMC personal identification number.




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Out patient A patient who attends a hospital, consulting room, or outpatient clinic and is not admitted as a day patient or an inpatient. Pre-existing condition Any disease, illness or injury for which:

you have received medication, advice or treatment; or

you have experienced symptoms; whether the condition has been diagnosed or not in the xxx years before the start of your cover. (The same period is not common to all insurers)' Treatment Surgical or medical services (including diagnostic tests) that are needed to diagnose, relieve or cure a disease, illness or injury.

It is recognised that some firms use the term 'active treatment'. This has the potential to confuse customers given the current agreed definition of treatment. If firms do use the term it must be accompanied by a specific definition.

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B Templates for setting out key information about PMI B.1 Explaining the choice of underwriting

Insurers must provide the following information to customers taking out individual policies before the contract is concluded. This applies to employers of group/corporate schemes if the members are medically underwritten. ‘YOUR UNDERWRITING CHOICES’

Required headings with sample format and wording: 1. Explanation

Explain the choice of underwriting options and what each option means. Then give a general description of PMI including:

PMI, like other insurance policies, provides cover against an unexpected event happening after the start of the policy. In health insurance this means cover for the cost of unforeseen private medical treatment arising after the policy starts.

PMI is not intended to cover the cost of medical conditions, and related conditions that arose before the start of the policy. A related condition is one that is caused by, or could be the cause of, another condition.

The policy does not cover the cost of all medical treatments and customers should check their policy carefully so they know which treatments are covered, and any limits on this cover.

How PMI works with the NHS.

Sample wording:

‘New medical conditions arising after the start of the policy will be covered subject to the policy terms and conditions’.

‘You must answer all questions as fully and as accurately as you can, to the best of your knowledge and belief.’

‘PMI may provide cover for initial investigations needed to diagnose a new condition and the initial short term treatment up to the point of stabilisation.’

‘PMI does not cover treatment for medical conditions that keep on coming back or are likely to continue, and/or need regular or periodic monitoring, treatment, medication or medical advice.’

PMI is designed to work alongside, not to replace all the services offered by the NHS and in all cases customers retain their right to use the NHS. Some policies may cover certain types of treatment for, or elements of, chronic conditions but this is not usually the main purpose of PMI.




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2. First heading Understanding your PMI underwriting options Include:

What the underwriting process is (that is, the process by which an insurer decides on what terms it will accept a person for cover based on the information they supply).

Sample wording

‘Underwriting for PMI is the process by which an insurer decides on what terms it will accept a person for cover based on the information they supply.’

‘You have a choice between two ways of applying for the cover (insurer's name/product) provides.’

3. Second heading

Full medical underwriting Explain the full medical underwriting option, including:

A customer choosing this option will be asked a number of questions about their health. The answers should be carefully considered as they will form the basis on which the insurer will accept cover. It might be necessary for the insurer to approach a doctor for more information.

Cover for the cost of pre-existing conditions that might need treatment in the future. How the customer will be notified about cover for conditions and exclusions.

Sample wording

‘You need to complete a health questionnaire (also called a medical history declaration).’

‘We will review your information and decide what cover we can offer you. If necessary, we may need to ask your doctor for more information to help us do this.’

‘If you have a pre-existing condition that may need treatment in the future, we will usually exclude it from the cover along with any conditions related to it.’

‘We will show any exclusion on the policy schedule you receive from us when we have processed your application. (The same process will also apply for any members of your family included in your application.)’

‘If we exclude treatment for a pre-existing condition at the time when your policy starts we can, in some cases, review the exclusion in future if you ask us to do so.’

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4. Third heading Why some customers choose full medical underwriting? Explain why some customers choose full medical underwriting for example, saving time at point of claim and certainty about the extent of cover for the cost of treating pre-existing conditions at point of joining:

Sample wording

‘With full medical underwriting new medical conditions arising after the start of your policy will be covered immediately subject to the policy terms and conditions.’

A fully underwritten policy does not cover medical conditions that you (and your family) already have, (including any related conditions), when you take out the policy/join the company scheme/policy. On the application form we ask you to give us details of your (and your family’s) medical history and if necessary, we may write to your doctor for more information.

‘It is essential that you give us all the information we ask for, even if you have symptoms that have not been diagnosed. If you don’t, we will not pay any claim that you make in the future, or may even cancel your policy / group scheme membership / policy. If you are not sure whether or not to mention something, you should do so’.

‘If you have a medical condition which our underwriters feel is likely to come back, we will issue a policy, but that condition (and any related to it) will not be covered, either indefinitely, or for a set period of time’.

5. Fourth heading

Moratorium Explain the moratorium underwriting option, including:

A customer choosing this option does not need to fill in a health statement but will be automatically excluded for the cost of treating any pre-existing conditions during the first (usually) two years of the policy, for which they have received treatment and/or medication, or asked advice on, or had symptoms of (whether or not diagnosed), during the (usually) five years immediately before the PMI cover started.

Whether or not conditions that arise after the policy starts but are related to the pre-existing condition would also be excluded.

What happens if the customer has no symptoms, treatment, medication, or advice for those pre-existing conditions, and any directly related conditions, for (x) years after the policy starts.

Warning the customer if the cost of treating medical conditions that are likely to continue to need regular or periodic treatment, medication or medical advice, will never be covered by the policy.




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Sample wording

‘You should not delay seeking medical advice or treatment for a pre-existing condition simply to obtain cover under your policy.’

‘You do not need to fill in a health statement. Instead, we automatically exclude during the first (usually) two years of the policy any pre-existing conditions for which you (and any family member included in your application) have received treatment and/or medication, or asked advice on, or had symptoms of (whether or not diagnosed), during the (usually) five years immediately before your PMI cover started.’

6. Fifth heading Why some customers choose moratorium underwriting Explain why some customers choose the moratorium underwriting option, for example:

Only basic information needs to be provided by the person who is to be covered when they join and they will not be asked to disclose details of their medical history.

If the customer satisfies the criteria (usually two years) for a pre-existing condition, then treatment for that condition will automatically be covered should it later recur, subject to the policy terms and conditions.

Sample wording

‘With moratorium underwriting if you do not have any symptoms, treatment, medication, or advice for those pre-existing conditions, and any directly related conditions, for (usually) two continuous years after your policy starts, then we will reinstate cover for those conditions.’

Example 1 - How both options work

Customer question - I had an operation on my right knee recently.

Will I be covered for any further treatment to it after my policy starts?

Insurer’s response, Full Medical Underwriting

Insurer’s response, Moratorium Underwriting

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B.2 Explaining the cover for long-term treatment / chronic conditions

'YOUR PMI COVER FOR LONG-TERM TREATMENT / CHRONIC CONDITION(S)'

The format is prescribed so customers can compare different companies cover and exclusions.

This information is intended to explain to customers any cover for treatment that is provided for conditions that are likely to continue or keep recurring and are sometimes called chronic conditions.

Insurers must provide the explanation at the point of sale or as soon as possible thereafter, but in any event before the conclusion of the contract. It is recommended that members also send it to existing retail customers.

Members may choose to produce this information in the form of a leaflet or to incorporate it within their other point of sale material.

Only those examples relevant to the product need be used.

The explanation of cover for cancer must be provided in a distinct section, separately from information on other conditions (see annex B.3).

Members are free to provide information on specific conditions where they believe that their customers would find this helpful. Some insurers produce separate leaflets giving details of their coverage of particular conditions. The Statement of Best Practice is designed to permit this flexible approach.

Member firms must use the following prescribed format when giving details of their coverage:

1. Explanation

Include:

An introductory paragraph stating its purpose.

The statement ‘Exclusions that would normally apply to long-term/chronic conditions may not apply to cancer. Please refer to the section on cancer.’

2. First Heading:

‘What is a xxx condition?’ Include:




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The agreed Common Definition followed by a general description of the insurers’ own approach to covering these.

3. Second Heading:

‘What does this mean in practice?’ Explain:

The process undertaken by the insurer to establish whether or not a treatment for a condition is, or has become, long-term and the subsequent actions arising from this.

The situation where a person may transition from PMI to NHS care or if cover will stop once the treatment is considered to have become long term for a condition, and the implications of this.

Sample wording

‘Payment for treatment may stop at some point – this could be because of a policy limit, or because the condition is no longer short term and therefore the treatment is not something that your policy covers. There are many different conditions that can be acute or chronic and, for example, there are over 200 types of cancer. By the time you need to claim on your policy the treatment that is available may well have developed and improved from the time you first bought the policy. We consider your individual circumstances and examples are set out below to explain this. If you are receiving treatment which is covered by your policy at the time your cover ends, we may contact you so that you can discuss this and make arrangements with your specialist such as, a transfer to NHS care or for you to continue funding private treatment yourself.

4. Third Heading:

‘What if your condition gets worse?’ Explain:

What happens when treatment for a condition has been deemed long-term and then the condition has an acute flare-up.

PMI is intended to complement the NHS not replace it and patients may need to return to the NHS at a point where treatment for their condition is no longer covered under their policy. Different insurers manage this transition in different ways.

Sample wording

‘It is not usually possible to predict accurately the cost of a course of treatment at the time of cancer diagnosis. It is also difficult to estimate whether the amount of treatment available within a set time or financial limit will be sufficient to complete your treatment. If the costs of your treatment exceeded this limit, you may need to move to the NHS or choose to self-pay for your own treatment. This might require you to change hospitals, change doctors and change drug therapies or other treatments, part way through a cycle of treatment, potentially limiting the scope of your overall treatment.’

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5. Fourth Heading:

‘Examples’ The following examples should be worded exactly as they are shown below, with each insurer explaining how they would respond in the circumstances described. Where the example relates to a benefit which is not included in the product it need not be used, for example Example 4 relates to treatment by an osteopath, if osteopathy is not covered under the policy this example should not be used.

Example 1 – Angina and Heart Disease

Alan has been with insurer’s name for many years. He develops chest pains and is referred by his GP to a specialist. He has a number of investigations and is diagnosed as suffering from a heart condition called angina. Alan is placed on medication to control his symptoms.

Will Alan be covered?

Insurer’s response (to be included here)

Two years later, Alan’s chest pain recurs more severely and his specialist recommends that he have a heart by-pass operation.

Will Alan be covered?


Example 2 – Asthma

Eve has been with insurer’s name for five years when she develops breathing difficulties. Her GP refers her to a specialist who arranges for a number of tests. These reveal that Eve has asthma. Her specialist puts her on medication and recommends a follow-up consultation in three months, to see if her condition has improved. At that consultation Eve states that her breathing has been much better, so the specialist suggests she have check-ups every four months.

Will Eve be covered?


Eighteen months later, Eve has a bad asthma attack.

Will Eve be covered?


Example 3 – Diabetes

Deidre has been with insurer’s name for two years when she develops symptoms that indicate she may have diabetes. Her GP refers her to a specialist who organises a series of investigations to confirm the diagnosis, and she then starts on oral medication to control the diabetes. After several months of regular consultations




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and some adjustments made to her medication regime, the specialist confirms the condition is now well controlled and explains he would like to see her every four months to review the condition.

Will Deidre be covered?


One year later, Deidre’s diabetes becomes unstable and her GP arranges for her to go into hospital for treatment. Will Deidre be covered?


Example 4 – Hip Pain

Bob has been with insurer’s name for three years when he develops hip pain. His GP refers him to an osteopath who treats him every other day for two weeks and then recommends that he return once a month for additional treatment to prevent a recurrence of his original symptoms.

Will Bob be covered?


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B.3 Explaining the cover for cancer

This information is intended to explain to customers how insurers cover cancer. The explanation of the cover for cancer must be available before the conclusion of the contract. Member firms must have a distinct section in their policy documents to explain the cover for cancer. To allow for flexibility in approach, firms may consider having a separate leaflet, or a separate section in a leaflet, to explain the cover for cancer. The following example(s) should be worded exactly as below, with each insurer explaining how they would respond in the circumstances described.

Example 1 –Cancer

Beverley has been with insurer’s name for five years when she is diagnosed with breast cancer. Following discussion with her specialists she decides:

to have the tumour removed by surgery. As well as removing the tumour, Beverley’s treatment will include a reconstruction operation

to undergo a course of radiotherapy and chemotherapy

to take hormone therapy tablets for several years after the chemotherapy has finished

Will her policy cover this treatment plan, and are there any limits to the cover?


During the course of chemotherapy Beverley suffers from anaemia. Her resistance to infection is also greatly reduced. Her specialist:

admits her to hospital for a blood transfusion to treat her anaemia

prescribes a course of injections to boost her immune system



Despite the injections to boost her immune system, Beverley develops an infection and is admitted to hospital for a course of antibiotics.

Will her policy cover this treatment and are there any limits to the cover?


Five years after Beverley’s treatment finishes the cancer returns. Unfortunately it has spread to other parts of her body. Her specialist has recommended a treatment plan:

a course of six cycles of chemotherapy aimed at destroying cancer cells to be given over the next six months

monthly infusions of a drug to help protect the bones against pain and fracture. This infusion is to be given for as long as it is working (hopefully years)

weekly infusions of a drug to suppress the growth of the cancer. These infusions




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are to be given for as long as they are working (hopefully years)



David has been with insurer’s name for X years when he is diagnosed with cancer. Following discussion with his specialist he decides to undergo a course of high dose chemotherapy, followed by a stem cell (sometimes called a 'bone marrow') transplant.

Will his policy cover this treatment plan, and are there any limits to the cover?


When his treatment is finished, David’s specialist tells him that his cancer is in remission. He would like him to have regular check-ups for the next five years to see whether the cancer has returned.

Will his policy cover this treatment plan, and are there any limits to the cover?


Jenny has been diagnosed with cancer. Her policy has a limit and she decides to commence private treatment.

What help will be available if the policy limit is reached and she needs to transfer into the NHS?


Eric would like to be admitted to a hospice for care aimed solely at relieving symptoms.

Will his policy cover this, and are there any limits to the cover?


Where the policy provides cover for cancer, firms must explain clearly the cover for cancer using the mandated headings and content below, including:

Limits on time periods

Cycles of treatment

Maximum payments

Circumstances in which firms would not provide cover

When cover might be withdrawn

For individual business – firms will use the table, format and detail (headings and content) of the template below. For group (including corporate) business – firms will use the detail (headings and content) in a format that is appropriate to the other information provided to their customers.

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Firms may choose to provide additional separate information that is specific to a type of cancer.

Format for a section to explain the cover for cancer Headings Content – including limits and what is not covered Place of treatment • Hospice

• Hospital – inpatient • Hospital – out patient • At home

Diagnostic • What types do you cover? • Consultation • Test eg screening, monitoring • Scan • Genetics

Surgery

• What types do you cover? • Preventative • Treatment eg of secondary cancer • Palliative • Reconstructive

Preventative • Screening • Surgery • Vaccines

Drug therapy • What types do you cover? • Chemotherapy • Biological therapy • Drug status eg pre-licence, not NICE approved • To maintain remission • Maintenance therapy

Radiotherapy • Symptom relief eg for pain • Treatment • To maintain remission • Maintenance therapy

Palliative • Maintenance therapy End of life care • Maintenance therapy

• Nursing support Monitoring • Follow-up appointments

• Tests • Time limits

Limits • Time • Financial • Stage of illness • Clinical research trials • Other

Other benefits Is there a level of cover that is specific to cancer? • Experimental treatment • Advanced therapy • Pre-licensed • NICE appraised • Clinical research trials Are any additional services available to cancer patients? • Psychiatric




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Headings Content – including limits and what is not covered • Physiotherapy • Nutritional support • Stem cell/bone marrow transplant

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B.4 Explaining the cover for drug treatment

The explanation of the cover for drug treatment should include:

Instances where the insurance cover might end before drug treatment is completed and that not all drug treatment may be available on the NHS.

What options may be available to the customer in such a case. These could be:

o Return to the NHS and receive the same treatment, if available

o Return to the NHS and receive alternative treatment

o Pay for the treatment privately on a self-pay basis

Sample wording

‘If you are receiving treatment which is covered by your policy at the time your cover ends, we may contact you so that you can discuss this and make arrangements with your specialist such as, a transfer to NHS care or for you to continue funding private treatment yourself.’




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C Applicant requirements to disclose and their rights C.1 Applicants need to know about requirements to disclose in response to the insurer’s

questions.

Sample wording

‘You must answer any questions you are asked as fully and as accurately as you can, to the best of your knowledge and belief. If you do not your insurer may refuse to pay your claim and could cancel your policy.’

C.2 Applicants are under no obligation to:

a) Find out medical information not known to him/her to complete the application form.

b) Consent to disclosure of identifiable personal information to another party outside of the insurance company unless they are directly involved in assessing or managing the application or claim, or in reinsuring the risk.

C.3 Applicants have the right to Fair Treatment2 including to:

a) Change their mind about proceeding with the application for insurance.

b) Apply to another insurer.

c) Expect the insurer to assess an insurance application fairly, based solely on relevant evidence.

d) See a medical report prepared by their doctor before it is sent to the insurer, and to amend or add comments to it, under the Access to Medical Reports Act 1988 (or equivalent legislation in Northern Ireland).

e) To find out what personal, including medical, information the insurer has on file about themselves other than in specific circumstances, under the data protection legislation.

2 FSA principle 6 - Customers’ interests - A firm must pay due regard to the interests of its customers and treat them fairly.

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D Group (including Corporate) Schemes – roles and responsibilities

Insurer Issue corporate policy document (i.e. the contract) to the employer Make the plan, literature and terms & conditions available to the employer to give to the employees / dependants Communicate to the employer any changes to the policy benefits and terms & conditions Tell the employer what information to give to employees

Broker / Insurance Sales Representative

Advise the corporate customer on the purchase of their policy Provide FSA required documents including Disclosure and Statement of Demands and Needs Forward policy documents to the corporate customer upon receipt from the insurer

Employer / corporate customer Fulfil contractual obligation to pass information on to employee Inform employees of the existence of the plan Provide employees with access to policy literature e.g. hardcopy booklets or internet access Communicate changes in the plan benefits or terms & conditions to employees

Employee / beneficiary Provide accurate medical information if medical underwriting is a requirement

Documents

Healthcare insurance - Chartered Insurance Institute · 12/18/2012 · Healthcare insurance products IF7 study text, 2011–12 edition Web update 02: 18 December 2012 The 2011-12/13