FCA proposes new rules to help consumers with pre-existing medical conditions access suitable travel insurance

The Financial Conduct Authority (FCA) has today launched a consultation on proposals designed to help consumers with pre-existing medical conditions (PEMCs) have better access to travel insurance products.

The consultation is seeking views on introducing a new ‘signposting’ rule, to provide consumers with details of a directory of travel insurance firms that have the appetite and capability to cover consumers with more serious PEMCs. Firms will be required to signpost consumers in the following circumstances:

  • When cover is declined or cancelled mid-term due to a PEMC.
  • When cover is offered with an exclusion for a PEMC that cannot be removed.
  • Where a consumer is offered cover with an additional loading to their base premium due to their PEMC.

In addition to signposting, the FCA will be working with stakeholders to try to improve consumer understanding of the travel insurance market, including producing material on PEMCs. This information will help consumers understand the implications of travelling with exclusions, and how factors such as country of travel can impact medical costs and therefore travel insurance premiums.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA said:

‘We want to reduce the numbers of consumers, who are currently faced with a choice of not travelling or travelling without insurance, and running the risk of incurring significant costs, including medical bills abroad. 

‘The changes proposed today will be an important step in helping people to navigate the market more easily and also in reducing the number of customers who are over-paying significantly for travel insurance.’

The FCA estimates there to be up to 14.1 million consumers with a PEMC that look to purchase travel insurance each year. Of these consumers, approximately 0.7% were declined cover, and 11% purchased a policy with an exclusion for their PEMC. Some consumers who are offered a policy may also benefit from shopping around, as they might find more affordable cover with a different provider. 

In developing its proposals, the FCA has engaged extensively with stakeholders, including through bilateral meetings and larger roundtable events. This has helped the FCA explore and test the possible options for addressing the problems identified, and develop proposals that address the harm in a proportionate and practical way. This work is part of the FCA’s wider work to improve outcomes for vulnerable consumers. 

The FCA is consulting on the draft rules until 15 September 2019. 

Notes to editors

  1. Consultation Paper P19/23: Signposting to travel insurance for consumers with medical conditions
  2. Feedback Statement 18/1: Call for input on access to insurance
  3. Call for Input: Access to insurance
  4. FCA Mission: Approach to consumers