Insurers are to change the way they work to support customers with mental health conditions, the Association of British Insurers has said.
In new guidelines published this week, the ABI has laid out new rules for health, travel, and protection insurers on how to conduct business to better support those with mental health conditions.
Though not an industry regulator, its 200+ members are obliged to adopt the changes to its code of conduct.
Nobody should feel excluded from financial services. Customers across the services sector face too many barriers, and insurance is no different. People can find it difficult to navigate the increasingly digitised economy, particularly in financial services. For people with mental health conditions, this can be particularly distressing. Implementing the mental health standards will help ensure that customers get the right help and support they need when choosing to buy the insurance and is one step to help break down these barriers.said Yvonne Braun, Director of Policy for Long-Term Savings and Protection at ABI.
The new measures will aim to improve accessibility by allowing customers at least two choices of how they can communicate with insurers, and by offering help to complete application forms for those who need it.
Insurers will also be required to cut back on technical jargon and clearly signpost policy exceptions, as well as explaining to customers why they are asking certain questions during the application process.
Providers have until New Years’ Eve 2021 to implement the changes.
A study from Mental Health UK published in July showed that almost one third (31%) of people affected by mental illness had not applied for insurance in the past because they thought they would not get cover due to their diagnosis.
One survey respondent said:
I have bipolar disorder but was refused life insurance even though I had it previously with a clause in it saying they wouldn’t pay out for suicide. I didn’t understand and was given no explanation.
Meanwhile, another person reported their distress over not knowing why they were being asked questions:
It’s awful, lots of questions with no understanding of how they are using the information. Then refusals or significant prices due to disability. I pay double what my husband does for less cover for life insurance.
Mental Health UK reported that many applicants with mental health conditions are rejected upon their first application and, without guidance on how to object to high premiums, often end up paying through the nose or not being able to afford cover at all.
Under the new guidelines, insurers will need to provide customers with information about why an application was rejected, if requested.
Our research found that applying for insurance has often been a difficult and upsetting process to navigate for people who’ve experienced mental health problems, with over two-thirds of people feeling that they’ve experienced discriminationsaid the charity’s Associate Director for Advice, Information and Training, Sarah Murphy
Thankfully, change is on the horizon, and we’re delighted to have supported the ABI to produce these new industry standards and to create the Mental Health & Insurance guide. People living with mental illness are often disadvantaged when buying insurance, so it is excellent to see the insurance industry coming together and working with mental health organisations. We want to encourage insurers to implement these historical standards as soon as possible and help the thousands of people living with a mental illness have fair access to insurance,” he said.Dr. Jed Boardman is the social inclusion lead at the Royal College of Psychiatrists, which helped to develop the new rules along with ABI and Mental Health UK
The ABI is the UK insurance industry’s leading members association, which represents close to half of the UK’s insurance companies, as over 200 of the UK’s 413 providers are members. Upon joining, its members agree to abide by compulsory codes of conduct.
The UK’s insurance market is the largest in Europe and the fourth largest in the world.