HISTORIC PRESS RELEASE : Long-Term Care Insurance to be Regulated [October 2001]

The press release issued by HM Treasury on 22 October 2001.

Long-term care insurance (LTCI) is to be fully regulated to help prevent people from buying unsuitable policies, Ruth Kelly, Economic Secretary to the Treasury announced today.  The Financial Services Authority will have responsibility for regulating the selling and marketing of these products.

Insurance for the provision of care in old age or long-term illness is a relatively new product and its uptake is expected to grow, given the right conditions.  The Treasury believes it is important to give consumers adequate protection at an early stage of the development of the LTCI market.

Ruth Kelly said:

“As with pensions and ISAs, we want to help people to provide for their security whenever they can.

“Long-term care insurance can be expensive and tends to be sold to people at the same time as wider financial planning for the last few years of a person’s life.   We think consumers need protection when making critical decisions at this point in their lives.

“If someone eventually needs care, they don’t want to find that their insurance won’t pay out for the level of care they expected when they paid the premiums.  Regulation seeks to prevent this type of scenario”.

“By asking the Financial Services Authority to regulate the sale and marketing of long-term care insurance, we hope to protect consumers and allow the market to develop within that regulatory environment.”