He says that unlike in the world of travel insurance though, where it is mandated that any case of adverse terms must include signposting, things are little different for protection because in many circumstances loadings or exclusions are warranted.
“For this reason, the decision was made to only ask for signposting on hard decline cases, that is, those that the insurer is unwilling to offer,” he says.
“If anybody wants to incorporate signposting for other scenarios they certainly can, but the recommendation is only for declined cases.”
An avenue for everyone
Protection specialist and cabinet office disability champion Johnny Timpson says the signposting workstream is now closed.
So, with the governance of BIBA, the industry will now have a committee of insurers, advisers, charities, trade bodies and consumer groups who will assess progress and report regular feedback.
To help illustrate why signposting is needed to help the market reach its full potential, Mr Timpson explains the regulation journey in the UK.
“There were around 150,000 advisers 25 years ago.
"There are now around 30,000 and only a tenth of those advise on protection.
"Post-RDR and post mortgage review, a reduction in participating intermediary firms has reduced the number of those who advise on individual protection, business protection and group risk.
“A big part of my role is to go to around the country, speaking at various regional events for brokers hosted by the likes of the Personal Finance Society and Association of Mortgage Intermediaries.
"I try to counter arguments against getting involved in protection, such as: the cost to service protection is too high; it’s too complex an area; the perception is that insurers only want young and healthy people.
“I point out that acting in the customer’s best interests is a thread running through all training and regulation.
"And, on that note, advisers have a duty to identify needs. And if they can’t deal with an aspect of clients’ needs themselves, the next best thing is to speak to a specialist protection advisory service.”
What does this mean for advisers?
Roy McLoughlin, associate director of Cavendish Ware and co-chair of the Income Protection Task Force (IPTF), says that signposting will “revolutionise” the protection industry.
“Sourcing cover for those previously considered uninsurable is obviously important, but a bigger part of signposting for me is about advisers who don’t want to advise on protection – perhaps wealth managers, employee benefits consultants or mortgage brokers. They now have an avenue.”
Signposting might also help raise further awareness of the sector, providing resourceful advisers for whom some doors have closed – for example, Defined Benefit pension transfers – with potential new income streams.
