New rules aim to cut rejected insurance claims

Fewer insurance claims will be turned down from now on, after the insurance industry signed up to new rules.

Trade body the Association of British Insurers (ABI) said people would benefit from a new industry commitment to pay out on protection policies even where medical information has not been disclosed, unless the claimant deliberately withheld it.

Thousands of claims on critical illness, income protection and life insurance policies are rejected every year because holders have failed to give relevant medical information.

The ABI said, from now on, in cases where such information has inadvertently not been provided, insurers would pay out a "fair sum, reflecting risk and premiums paid".

In a small number of exceptional cases, premiums will be refunded if the insurer decides it would not have taken on the policy had it known the full facts.

Stephen Haddrill, the ABI's director-general, said: "Customers want to know that their insurance claim will always be assessed fairly and paid without fuss.

"The industry wants customers to be able to take out insurance with confidence.

"Today, insurers have signed up to ensuring both of these happen; the number of protection claims that are turned down will fall."

The new rules follow improvements in application forms and communications with customers, designed to cut the number of claims rejected due to "non-disclosure".

source:http://uk.reuters.com/article/personalFinanceNews/idUKHIL96088820080110