Insurance companies are not in the business of taking on risks without first obtaining as much background knowledge as possible. This applies whether they are insuring your house, your car, your possessions or your life. There is however a difference in the operation of such policies. Whilst there is nothing surprising in those seeking competitive prices being prepared to change insurers as necessary for cover for the material items in their lives, a change of insurer for life cover is much less likely.
This factor makes it more important for insurance companies to obtain the most accurate information available relating to the medical history of the prospective customer. Information available however makes it clear that the specific information needed is not always what has been provided.
What insurance companies need (and in fact what they pay for) is specific information relating to their potential customer’s past illness which will have, or is likely to have a bearing on their life expectancy. This is after all what life insurance is all about.
What has been supplied by GPs has not always met this core requirement, and in some cases the insurance company has simply been supplied with a copy of the patient’s records. To a GP these records should read like an open book; their training enables them to take a broad view and provide the most accurate summary available relating to the length of life which the patient should be able to expect.
Whilst insurers may have experience of life insurance cases, they are not trained to be able to assess the effects of an illness on an individual, which is why they pay doctors to provide such information. It must be remembered that the future of their company depends very much on them getting reliable facts, which can be used to assess the risks and enable them to do their calculations correctly.
An additional factor is that, in supplying patient’s notes to insurers, GPs are going against the rules on patient confidentiality. They are permitted to respond to insurers requests for information as this will be done with the full knowledge of the patient. The patient will not however expect the insurer to be supplied with extraneous information which has no bearing on the life insurance question.
Now the good news is that the BMA (British Medical Association) and the ABI (Association of British Insurers) have concluded discussions which have resulted in agreement being reached on a way forward which should be satisfactory for all concerned.
On behalf of GPs, the BMA have agreed that reports to insurance companies which are prepared for life insurance applications shall be of the high quality patient specific type required. In return the ABI have agreed that the charges for these reports shall increase by 6% per annum over the first five years of the agreement.
Compounded, this means that in five years the amount per report which is paid by the insurance company will rise by around 34%. This will give hard pressed GPs the incentive necessary to make time for the preparation of accurate medical reports. This point has been made by the BMA in advice to GPs regarding the new agreement. They have pointed out that improvement in the accuracy of life insurance information on which quotations are based is an important consideration, impinging as it does on the quality of life for those patients.
It is good to see an apparently satisfactory outcome to a problem which has been a thorn in the flesh for both the BMA and the ABI for some time.