Norwich Union has overhauled its approach to insurance claims hampered by non- disclosure in light of fresh in-dustry guidelines.
NU has pledged to make proportional payouts in non-disclosure cases unless it discovers that customers have deliberately withheld information.
The move follows guidelines published by the Association of British In-surers on January 9, which call for providers to be more flexible in their treatment of non-disclosure.
The guidelines, which NU helped formulate, state that when relevant data has not been provided, insurers must pay customers a fair sum reflecting the risks posed by individuals.
Premiums will be refunded in non-disclosure cases when insurers would not have taken on policies had they been privy to clients’ full medical histories.
Last September, NU spearheaded a pi-lot project with Personal Touch Financial Services, inviting 805 PTFS clients to review their original protection policy applications.
The project’s aim was to allow customers with life and critical illness policies to correct any mistakes or omissions which could have invalidated their claims.
It found that only three clients’ non-disclosure had the potential to affect the insurer’s original underwriting decision.
Dev Malle, sales director at PTFS, says: “This research shows the quality of the advice given by our brokers is high, with non-disclosure affecting less than 0.5% of clients.
“We have been proactive in offering a tele-underwriting service panel but our brokers can take comfort from this research, knowing they are doing the right thing.”
Willie Mowatt, director of protection at NU, says: “Non-disclosure has been a problem for some time and the ABI guidelines are a step forward in tackling the issue.
“We always advise customers that if they feel they might have missed something off their applications, it’s better to inform their insurers to ensure their policies are valid than risk receiving partial payments or even having claims rejected later on.”