Insurers demand controls on long-term care sales
Monday 17 June 1996
Despite claims by Stephen Dorrell, the Health Minister, that controls would "inhibit innovation and the development of new products", insurers said yesterday they wanted long-term care to be brought under the Financial Services Act.
The Association of British Insurers, which had previously opposed tougher regulation, is due to issue its own proposals this week.
A spokesman said yesterday: "We have decided that the sale of such products should be controlled under the FSA."
David Robinson, head of sales and marketing at Scottish Provident, said: "We believe strongly that the public must be reassured that legislation governing any form of partnership arrangement [between the Government and insurers] has been thought out thoroughly before it is introduced." He added that selling of such plans should be regulated by the Personal Investment Authority, the financial watchdog.
Legal & General and Prudential, two of Britain's leading insurers, also said they were in favour of effective regulation of the market.
Research by Munich Re, a leading insurer, said last month that the market for long-term care products could be worth up to pounds 10bn a year. Sales of home-income plans, where homeowners surrender part of the equity in their home in return for a guaranteed income in old age, could be worth up to pounds 100bn, some estimates suggest.
The insurers' initiative in calling for tough regulation is aimed at preventing a repeat of the pensions scandal, in which 1.5 million people were wrongly advised to buy a personal pension.
The proposal to boost the merits of private cover follows increasing anger among many elderly people and their children that they are being forced to sell off their only assets to fund the costs of care.
Last month, Mr Dorrell issued a consultation paper, in which the Department of Health proposes that for each pounds 1-worth of cover bought by a policyholder, local authorities will disregard pounds 1.50 of assets when means-testing elderly people for long-term care.
When added to the pounds 10,000 in assets disregarded by the authority when means-testing individuals, a one-off premium of pounds 7,000 might allow a person to protect a house worth pounds 60,000 from having to be sold before the council has to help out.
However, the Government said last month that it felt there was little need to regulate the new industry because this was likely to stifle innovation and competition.
Consumer groups have argued that without controls on how they are sold, long-term care policies could be targeted at vulnerable people, who may be frightened into taking out the wrong plan.
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 2 Orange Is The New Black has not been cancelled – it was a hoax
- 3 Why I'm on the brink of burning my Israeli passport
- 5 Blackest is the new black: Scientists have developed a material so dark that you can't see it...
Pope Francis: ‘One in 50’ Catholic priests, bishops and cardinals is a paedophile
Fry ‘criticises Operation Yewtree in dinner party rant’ calling for tougher laws to deter false sex abuse allegations
Supermoon 2014 in pictures: Moon appeared bigger and brighter at the weekend
Saharan remains may be evidence of first race war, 13,000 years ago
Israel-Gaza conflict: ‘Sderot cinema’ image shows Israelis with popcorn and chairs 'cheering as missiles strike Palestinian targets'
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
Emergency data law: David Cameron plots to bring back snoopers’ charter
NUT strike: David Cameron announces crackdown on strike action ahead of mass industrial action
iJobs Money & Business
£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...