Most critical illness insurance plans are covered by ABI Codes of Practice. You can get information on these codes from www.abi.org.uk.
In addition, the actual critical illness insurance plan providers (often large UK life insurance companies) are also regulated by the Financial Services Authority (FCA).
Below is an extract from the Chartered Institute of Insurers explaining how providers are accountable to this organisation.
More information can be found on the FCA website.
At present, critical illness insurance which is pure protection is regulated by the Financial Conduct Authority (FCA) under the Insurance: Conduct of Business Sourcebook. In some cases critical illness insurance is regulated under the stricter Conduct of Business Sourcebook. This applies where there is any investment element (for example, the policy is unit linked or with profits or includes surrender values or the policy term is whole of life).
The FCA is reviewing its rules and one possibility is that, at some future point, a stricter regime might apply to the selling of critical illness insurance and other protection policies. The argument for this is that such policies are -high risk- and there may be a serious likelihood of consumer detriment if they are not sold correctly. The FCA has accused some critical illness providers of scare-mongering and using misleading statements in promoting the cover. This is a complex issue: the FCA itself understated the risk of cancer in its bulletin and providers have to tread a careful line between informing people (the statistics themselves are scary but that is not a reason for people to be unaware of them) and over-complicating or using inappropriate data.
However, to date no firm proposals to change the regulatory regime have been put forward. If they are the industry is likely to lobby against such a move, especially as it is generally agreed that most people have insufficient cover (the -protection gap-) and that any move that may discourage intermediaries from selling protection products would be a retrograde step.
