FCA Wants To Make Travel Cover Easier for Those With Pre-Existing Conditions

…proposals designed to help consumers with pre-existing medical conditions (PEMCs) have better access to travel insurance products.

One of the biggest complaints from the public over travel insurance is the varying T&Cs surrounding Pre-Existing Medical Conditions (PEMCs). Many holidaymakers, especially those aged over 65, struggle to get competitive cover, or somethimes any type of cover at all in certain countries. It is ultimately a kind of social exclusion and although insurers are in business and cannot accept all risks, there has to be a better way.

With this in mind, the Financial Conduct Authority (FCA) has today launched a consultation on proposals designed to help consumers with pre-existing medical conditions (PEMCs) have better access to travel insurance products.

The consultation is seeking views on introducing a new ‘signposting’ rule, to provide consumers with details of a directory of travel insurance firms that have the appetite and capability to cover consumers with more serious PEMCs. Firms will be required to signpost consumers in the following circumstances:

  • When cover is declined or cancelled mid-term due to a PEMC.
  • When cover is offered with an exclusion for a PEMC that cannot be removed.
  • Where a consumer is offered cover with an additional loading to their base premium due to their PEMC.

In addition to signposting, the FCA will be working with stakeholders to try to improve consumer understanding of the travel insurance market, including producing material on PEMCs. This information will help consumers understand the implications of travelling with exclusions, and how factors such as country of travel can impact medical costs and therefore travel insurance premiums.

In addition to signposting, the FCA will be working with stakeholders to try to improve consumer understanding of the travel insurance market, including producing material on PEMCs. This information will help consumers understand the implications of travelling with exclusions, and how factors such as country of travel can impact medical costs and therefore travel insurance premiums.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA said:

‘We want to reduce the numbers of consumers, who are currently faced with a choice of not travelling or travelling without insurance, and running the risk of incurring significant costs, including medical bills abroad. 

‘The changes proposed today will be an important step in helping people to navigate the market more easily and reduce the number of customers who are over-paying significantly for travel insurance.’

Will new FCA proposals make it easier for people with Pre-Existing Medical conditions to get cheaper travel insurance?

GENERAL FCA STRATEGY OF HELPING VULNERABLE CONSUMERS

The FCA estimates there to be up to 14.1 million consumers with a PEMC that look to purchase travel insurance each year. Of these consumers, approximately 0.7% were declined cover, and 11% purchased a policy with an exclusion for their PEMC. Some consumers who are offered a policy may also benefit from shopping around, as they might find more affordable cover with a different provider. 

In developing its proposals, the FCA has engaged extensively with stakeholders, including through bilateral meetings and larger roundtable events. This has helped the FCA explore and test the possible options for addressing the problems identified, and develop proposals that address the harm in a proportionate and practical way. This work is part of the FCA’s wider work to improve outcomes for vulnerable consumers. 

The FCA is consulting on the draft rules until 15 September 2019. 

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