FCA introduces new signposting to benefit customers with PEMCs


The UK Financial Conduct Authority (FCA) has introduced new requirements to help consumers with more serious pre-existing medical conditions (PEMCs) better navigate the travel insurance market

The FCA’s new signposting changes are intended to help end the injustice felt by many consumers with serious PEMCs, who are often denied cover for their condition, or else offered coverage at what they consider to be unaffordable premiums.

A solution that’s best for all
The new signposting rules not only aim to reduce the number of uninsured consumers by opening up their access to travel insurance products, they also aim to increase customer confidence and trust in the travel insurance market. This will be achieved through:

  • Requiring firms to direct certain consumers with PEMCs to a directory of specialist providers.
  • Introduce guidance that firms selling travel insurance policies that exclude PEMCs should tell consumers whether and how these PEMC exclusions can be removed.
  • Introduce guidance for firms reminding them to assess the risk from medical conditions and calculate medical condition premiums using reliable information that is relevant to assessing this risk. This will help make sure that consumers are quoted a fair premium which properly covers their circumstances.

These new rules will be of interest to: all firms that offer retail travel insurance, including insurers, Lloyd’s managing agents, intermediaries and appointed representatives (these are expected to have implemented the new requirements by 5 November 2020); banks that offer packaged bank accounts that include travel insurance; insurance industry trade associations; charities, particularly medical charities; consumer organisations; and consumers, primarily those with PEMCs.

Positive reactions
The response from the industry thus far seems to be positive. Charles Offord, Managing Director of UK-based Co-op Insurance, said: “We’re really pleased that the FCA has introduced new signposting to help people with pre-existing medical conditions access more affordable travel insurance. Currently, one-third of people struggle to get cover and of these, three-fifths say it's due to their pre-existing medical condition.
“Two years ago,” Offord continued, “we launched travel insurance for people of any age and any medical conditions to address this need and the uptake has been significant.  We therefore hope this latest announcement from the FCA encourages others to follow suit.”
Elsewhere, Kevin Hancock, Chair of the Society of Insurance Broking, asserted that it was vital that all consumers should be able to access the right travel insurance. “It makes sense that firms offering retail travel insurance should point consumers they are unable to assist towards a directory of specialist providers who can provide cover to those with pre-existing medical conditions,” he said. “We will support the Money and Pension Service’s work to create its directory, and are willing to assist in any way possible. We look forward to receiving details of the application process for firms later in February.”

In line with the new regulations, the FCA also noted that firms will be required to include the details of the directory on their website within 30 days of becoming aware of the directory going live. “We expect the MaPS directory to be completed by Summer 2020,” the Authority added, saying that it would be supporting MAPS’ work to create this directory and that further information about the directory, including details of the application process for firms, would be published soon. 
“We will carry out a review approximately 12-18 months post-implementation to assess whether our rules and guidance are delivering our intended outcomes,” said the FCA.