ABI Statement of Best Practice for Private Medical Insurance
Common Definitions
2007 consultation paper
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CONTENTS
page
1.
Introduction
3
2.
Common Definitions explanation and related consultation questions
4
3.
Explanation of cancer cover and related consultation questions
8
4.
Summary
11
5.
Replying to this consultation paper
12
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1. Introduction
The Statement of Best Practice (SoBP) for Private Medical Insurance (PMI) was
first produced in 1999. Following the Financial Services Authority regulations it
was amended, and then revised in July 2006. The ABI undertook to complete a
review of the common definitions for PMI. As a result the PMI Committee tasked
the PMI Panel with evaluating the current list of definitions with a view to
improving or adding to these in order to help improve clarity.
The ABI aims to be proactive in ensuring that common definitions are clear and
accurate. This consultation paper explores options for improving clarity, and
further explaining the approach to cancer cover. This is to be done with the
following aims:

Help customers to make informed decisions:
o Improve clarity for customers so they can understand what each
product does, and does not, cover.
o Make it easier to compare PMI insurance from different insurers.

Help insurers to treat their customers fairly.
Whilst working towards the above aims, the ABI appreciates the need for insurers
to control and manage their portfolios in accordance with their own approach to
risk.
The ABI is consulting with insurers, reinsurers, distributors, trade bodies,
consumer groups, and the Financial Ombudsman Service on the following
changes to the common definitions in the SoBP:

Improving clarity – we are consulting on definitions and on options to
help customers understand what is covered.

Introducing cancer as a condition that requires a more detailed
explanation of the cover provided - as part of this we are consulting on
the introduction of a common definition for cancer. We are also consulting
on the introduction of a specific explanation of cancer cover. We have
included an example of a template table containing prompts that firms
might want to consider when explaining what is covered.
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2.
Common Definitions explanation and related consultation questions
The common definitions set out in this section should be used in policy or other
documents (with the exception of those relating to international products). The
common definitions are not designed to describe the scope of cover provided by a
product. Their purpose is to ensure that in whatsoever context the word or
phrases so defined are used they will have the same meaning.
Members will be free to use whatever other information or support material they
see fit to describe the extent or otherwise, of cover provided.
2.1
Acute condition
'A disease, illness or injury that is likely to respond quickly to treatment which aims
to return you to the state of health you were in immediately before suffering the
disease, illness or injury, or which leads to your full recovery.'
We considered a number of variations of this definition and recommend retaining
the current definition.
2.2
Cancer
'A malignant tumour, tissues or cells, characterised by the uncontrolled growth
and spread of malignant cells and invasion of tissue.'
In order for insurers to make reference within their policy documents to cancer
and claims for cancer it was felt that a common definition would be required to
ensure understanding of what is meant by cancer.
Q1. Do you agree with the principle of including a common definition for
cancer?
Q2. Do you agree with the wording of the new cancer definition? If ‘no’,
what do you suggest for the wording of the definition?
2.3
Chronic condition
‘A disease, illness, or injury that has one or more of the following characteristics:
 it needs ongoing or long-term monitoring through consultations, examinations,
check-ups, and / or tests;
 it needs ongoing or long-term control or relief of symptoms;
 it requires your rehabilitation or for you to be specially trained to cope with it;
 it continues indefinitely;
 it has no known cure;
 it comes back or is likely to come back.’
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The proposed definition makes contextual changes to improve clarity and
removes the bullet point ‘it is permanent’ on the basis that it does not add to the
definition.
Q3. Do you agree with the new wording of the Chronic definition? If ‘no’,
what do you suggest for the wording of the definition?
2.4
Day patient
'A patient who is admitted to a hospital or day patient unit because they need a
period of medically supervised recovery but does not occupy a bed overnight.'
The use of hyphenation would be at the discretion of each member organisation.
The previous definition had the word 'treatment' which has a separate definition
(refer 2.10). The change to the definition helps avoid this repetition and instead
clarifies what a day patient is. The heading ‘Day-patient treatment’ is replaced
with ‘Day patient’.
Q4. Do you agree with the wording of the new Day patient definition? If ‘no’,
what do you suggest for the wording of the definition?
2.5
Diagnostic tests
'Investigations, such as x-rays or blood tests, to find or to help to find the cause of
your symptoms.'
We considered a number of variations of this definition and recommend retaining
the current definition.
2.6
Inpatient
'A patient who is admitted to hospital and who occupies a bed overnight or longer,
for medical reasons.'
The use of hyphenation would be at the discretion of each member organisation.
The previous definition had the word 'treatment' which has a separate definition
(refer 2.10). The change to the definition helps avoid this repetition and instead
clarifies what an inpatient is. The heading ‘In-patient treatment’ is replaced with
‘Inpatient’.
Q5. Do you agree with the wording of the new Inpatient definition? If ‘no’,
what do you suggest for the wording of the definition?
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2.7
Out patient
'A patient who attends a hospital, consulting room, or outpatient clinic and is not
admitted as a day patient or an inpatient.'
The use of hyphenation would be at the discretion of each member organisation.
The previous definition had the word 'treatment' which has a separate definition
(refer 2.10). The change to the definition helps avoid this repetition and instead
clarifies what an out patient is. The heading ‘Out-patient treatment’ is replaced
with ‘Out patient’.
Q6. Do you agree with the wording of the new Out patient definition? If ‘no’,
what do you suggest for the wording of the definition?
2.8
Pre-existing condition
'Any disease, illness or injury for which:
 you have received medication, advice or treatment; or
 you have experienced symptoms;
whether the condition has been diagnosed or not in the xxx years before the start
of your cover.
(the same period is not common to all insurers)'
We considered a number of variations of this definition and recommend retaining
the current definition.
2.9
Nurse
'A qualified nurse who is on the register of the Nursing and Midwifery Council
(NMC) and holds a valid NMC personal identification number.'
The proposed definition makes contextual changes to make it easier to locate.
The heading ‘Qualified nurse’ is replaced with ‘Nurse’ and the term ‘qualified’ is
included in the definition.
Q7. Do you agree with the new wording of the Nurse definition? If ‘no’, what
do you suggest for the wording of the definition?
2.10
Treatment
'Surgical or medical services (including diagnostic tests) that are needed to
diagnose, relieve or cure a disease, illness or injury.'
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It is recognised that some firms use the term 'active treatment'. This has the
potential to confuse customers given the current agreed definition of treatment. It
is recommended, therefore, that where firms use this term it must be
accompanied by a specific definition.
We considered a number of variations of the definition for treatment and
recommend retaining the current definition.
We considered terms that require clarity and it was noted the term active
treatment was unclear.
Q8. Do you agree with the recommendation on the use of the term ‘active
treatment’? If ‘no’, what suggestions do you have?
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3.
Explanation of cancer cover and related consultation questions
The consultation on the SoBP identified the need for insurers to further explain
their approach to cover for cancer. To increase clarity and understanding this
explanation should not rely solely on the Acute Condition and Chronic Condition
common definitions but should involve detailed reference to the various treatment
intentions and treatment contexts that relate to cancer.
As discussed in section 2 of this paper, it was felt that a common definition for
cancer was required to determine when a customer can refer to the cancer
explanation for further information and/or guidance.
The benefit of explaining the cancer cover is to aid transparency. Cancer is a
complex area. It covers a range of conditions and is an area of growth in new
medical interventions. The purpose of having an Explanation of Cancer Cover is
to provide clarity and transparency to the customer regarding the extent of the
cover, the limits on the cover, and when the cover starts and ends.
Firms must have a distinct section in their policy documents to explain the cover
for cancer. To allow for flexibility in approach, firms may consider having a
separate leaflet, or a separate section in a generic leaflet, to explain the cover for
cancer. The explanation of the cover for cancer must be available at point of sale.
Where appropriate, firms should explain clearly what would be covered, including
limits on time periods, cycles of treatment, maximum payments, and
circumstances in which firms would not provide cover.
The proposed recommendation seeks to aid transparency and to make it easier
for customers to understand what their policy covers. Improving clarity regarding
cover is for each firm to look at themselves, including the level of detail.
Q9. Do you agree with the recommendation firms should explain clearly
what would be covered? If ‘no’, what suggestions do you have?
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Example of a Cancer Section:
Firms may or may not choose to use this format. Firms may also choose to
provide separate information that is specific to a type of cancer. The example
template contains prompts for firms to consider when explaining what is covered,
including clarifying when cover starts and ends:
Recommended topics
Place of treatment
Diagnostic
Surgery
Preventative
Drug therapy
Radiotherapy
Palliative / Terminal
Monitoring
Other
Prompts for recommended topics







hospice
hospital
at home
consultation
test
scan
genetics
 screening
 surgery
 vaccines
What types do you cover?
 chemotherapy
 to maintain remission
 maintenance therapy
 biological therapy
 including when given for pain relief
 maintenance therapy
Is there a level of cover that is specific to
cancer?
 experimental treatment / advanced
therapy / pre-licensed / NICE
appraisal
 clinical trials
Q10. What comments do you have on the recommended topics within this
example template?
Currently, firms use a leaflet to explain their approach to chronic conditions. As
part of this explanation, however, the leaflet often reflects the approach to acute
conditions too. The leaflet provides valuable information to customers but its title
(Chronic Conditions leaflet) is not effective given the spectrum of conditions
covered and the complexity of conditions, such as, cancer.
We recommend continuing the use of a leaflet to explain the firm's approach to
different conditions. The leaflet would include a section with extra information
about cancer, as agreed at the last review of the SOBP, recognising that cancer
can sometimes become chronic but this may not always be the case.
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The leaflet should be renamed to allow firms the latitude both to expand their
current information and to include other areas of cover in addition to the agreed
examples already contained within the current Chronic Conditions leaflet. Firms
should retain the existing cancer examples and may choose to use them in the
cancer section, within their policy wording or leaflet / brochure. We suggest the
title for such a leaflet could be 'Ongoing Conditions' or 'Your PMI Cover
Explained'.
Use of a generic leaflet to explain PMI cover would not prevent firms from
providing a cancer specific leaflet, if they so choose.
When referring to cancer, firms may wish to use terms such as, preventative,
maintenance, and palliative. In order to increase clarity, firms should avoid using
the Common Definitions “Acute Condition” or “Chronic Condition” within this
explanation of cover for cancer.
The recommendation seeks to give insurers more flexibility through having a
generically named leaflet that discusses cover for Acute and Chronic Conditions
and clarifies the extent of cover provided for cancer. Firms may want more
guidance on what could be contained in this leaflet but, for the purposes of this
consultation, we would like your views on the proposed changes in principle.
Q11. Do you agree with the recommendation to rename the Chronic
Conditions leaflet as the Ongoing Conditions leaflet or Your PMI Cover
Explained leaflet? If ‘no’, what do you suggest for the title?
Q12. Would you want standardisation of the leaflet?
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4.
Summary
The purpose of this paper is to ensure customers have clear information so they
can make informed decisions about the private medical insurance cover they will
purchase.
We recommend strongly that firms:
 use the agreed common definitions
 have a clear heading and separate section to explain their cover for cancer
 use the sample template as a means of explaining their cancer cover
 are clear about when cover starts and ends, what is covered, and limits on
benefits
 avoid relying solely on the terms acute and chronic to explain cancer cover
and clearly explain the reason when cancer is placed under a chronic heading
 use a generic title for a generic leaflet, for example, Ongoing Conditions leaflet
or Your PMI Cover Explained leaflet
Firms may choose to:
 have a separate leaflet to explain cover for cancer
 have a generic leaflet including a section explaining cover for cancer
 not use a leaflet and put all the information in the Cancer Section
 include the examples of cancer explanations, currently in the Chronic
Conditions leaflet, in other leaflets or policy documents
 use cancer specific leaflets
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5.
Replying to this Consultation Paper
Views are invited on this consultation paper. Please send your responses to Erin Flood, Health Team, by Friday, 27 July 2007
at the Association of British Insurers, 51 Gresham Street, London EC2V 7HQ or by email to [email protected]. You are
invited to attend a Question & Answer session on this consultation paper to be held at the ABI on Tuesday, 29 May 2007, from
11.00am to 1.00pm.
The full list of Consultation Questions for which we are inviting responses is:
Q
Do you agree with the:
1
 principle of including cancer as a common definition?
2
 wording of the new Cancer definition?
Y
N
Your suggestions
If ‘no’, what do you suggest for the wording of the definition?
3
 new wording of the Chronic definition?
If ‘no’, what do you suggest for the wording of the definition?
4
 wording of the new Day patient definition?
If ‘no’, what do you suggest for the wording of the definition?
5
 wording of the new Inpatient definition?
If ‘no’, what do you suggest for the wording of the definition?
6
 wording of the new Out patient definition?
If ‘no’, what do you suggest for the wording of the definition?
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Q
Do you agree with the:
7
 new wording of the Nurse definition?
Y
N
Your suggestions
If ‘no’, what do you suggest for the wording of the definition?
8
 recommendation on the use of the term ‘active treatment’?
If ‘no’, what suggestions do you have?
9
 recommendation firms should explain clearly what would be
covered?
What comments do you have on the:
10
 recommended topics within the example template?
Do you agree with the:
11
 recommendation to rename the Chronic Conditions leaflet,
for example, as the Ongoing Conditions leaflet or Your PMI
Cover Explained leaflet? What do you suggest for the title?
Would you want:
12
 standardisation of the leaflet?
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