9th April 2020

The Financial Conduct Authority (FCA) has pushed back one of the implementation dates of its rules relating to its work on signposting consumers with pre-existing medical conditions (PEMCs) to travel insurance in order to allow firms to focus on responding to the Coronavirus (Covid-19) pandemic.

Under the new rules firms are required to signpost certain consumers with PEMCs to a directory of travel insurance providers which are willing and able to cover consumers with more serious PEMCs. The rules requiring firms to include details of a medical cover firm directory on its website 30 days after it becomes aware of an operational directory and is still scheduled to commence on 1st June 2020.

The implementation for actually starting to signpost, which was due to be in November 2020, has been put off to a date yet to be confirmed.

The Money and Pensions Service is currently developing a directory; however, it is not clear when this will be operational. The FCA said it will update stakeholders on this in due course.

Addendum to PS20/03

The FCA has also issued an addendum to its Policy Statement PS20/03 – Signposting to travel insurance for consumers with medical conditions  which it first published in February 2020. The regulator subsequently discovered that 20 responses had erroneously not been included in PS20/03. Those responses have now been reviewed and analysed. The FCA Board, having regard to the additional 20 responses, confirmed and re-made the Insurance: Conduct of Business Sourcebook (Access to Travel Insurance) Instrument 2020 (FCA 2020/03). Members can access the addendum by clicking here.

In the light of the additional feedback, the FCA Board made two changes to the definitions in the rules to give more clarity about the regulator’s expectations. The amendments are:

  1. The rules require firms to signpost where there is a medical condition exclusion that cannot be removed from the policy. The FCA has amended the definition of ‘medical condition exclusion’ to clarify that the requirement applies, unless the firm is satisfied, on reasonable grounds, that the medical condition exclusion is not relevant to any person covered under the policy.
  2. The FCA requires firms to signpost where the medical loading is £100 or more.  The FCA has amended the definition of ‘medical condition premium’ to clarify that this £100 threshold applies to each person covered under the policy.

Stakeholders also asked whether Insurance Premium Tax (IPT) is included in the £100 medical condition premium. The medical condition premium is part of the premium that relates to the risk associated with any medical conditions, and so under these requirements, IPT is not included in the £100 threshold for medical condition premium.

BIBA members’ compliance and regulation queries should be directed to: [email protected]

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