36 Feature – international PMI


say privately that UK-based insurance companies and brokers will sell you a policy for the US without telling the purchaser that renewal would be unlawful. After all, as long as the insurer fulfils its obligations, the treating hospital is unlikely to kick up a fuss as long as it is paid. Contravening US rules may arise as


much from ignorance as desire to make a sale. A proliferation of regulations in the US is partly to blame. For that reason, insurer InterGlobal errs


strongly on the side of caution. It does not recommend sales of any of its plans to non-US citizens travelling to the states if they intend to spend more than half a year there. Paul Weigall, the comapany’s global


head of sales and marketing, says: “Our understanding is that if anyone who is going to reside in the US more than 180 days in the year, they should get a US policy. Up to 180 days you’ll get away with it. “The trouble is that every state varies. Each


has its own rules as to what you can and can’t do. People think of the US as one country. But it’s effectively 52 countries as far as insurance goes. So you can never be too sure – and that’s a reason frankly why some people in the industry just leave the US alone.” Weigall continues: “It’s unlikely that a


hospital would refuse treatment or indeed refuse payment [from an international insurer], it’s a question of whether local regulations have been followed and fines and penalties if they haven’t.” AXA PPP International takes a more


relaxed line than InterGlobal. But only to the extent that InterGlobal’s six-month limit extends to one year – which seems to be nearer the industry standard. Karen Teasdale, the company’s overseas


marketing manager, says: “It’s made absolutely clear to members that they won’t be able to renew after a year. We won’t let people purchase a policy online. They have to speak to a sales adviser. “When they speak to a sales adviser and


get a quote they are told it is not renewable and the reasons are explained to them. It’s also made clear in their policy document that it’s only for a year.” Teasdale, who is clearly dismayed at


the way UK companies are handicapped compared to their US rivals, said there was no legal way round the renewal embargo. Even if the policyholder returned to the UK shortly before expiry of cover and sought to renew while physically outside the US, the insurer would not oblige. “The contract is for 12 months and if


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Want more pointers on how to advise your clients about iPMI? Check out theHealth Insurance Guide to Regulation and iPMI, available in the “Guides” section of www.hi-mag.com


EXPERT INSIGHT INTO KEY AREAS OF THE HEALTH INSURANCE INDUSTRY 1 International Supp.indd 1 18/11/2010 15:38


the purchaser sought to renew that would be an extension of the contract and we would not do it. If they came back for an extended period, ended their international policy then took out a new one, I believe that would be okay. But if they dropped back to the UK for a couple of weeks – no, we wouldn’t have that.” What rankles is that the other way round is perfectly lawful.


An American expatriate in Europe can renew medical cover at any time point without qualms. UK providers see America’s restrictions as protectionism


pure and simple. “The trouble is that every


state varies. Each has its own rules as to what you can and can’t do. People think of the US as one country. But it’s


effectively 52 countries as far as insurance goes” Paul Weigall, InterGlobal


It’s costing serious business, says Teasdale: “If you consider


IPPR research which estimates that 829,000 UK nationals live in the US and there was an increase of 20% between 2005 and 2008, you can get an idea of how much this is costing the insurance industry in the UK.” However, solutions look remote. The European Union could


pursue the matter as the entire continent is affected. But it has bigger worries. The subject is hardly even on the radar of the Association of


British Insurers (ABI). “It’s restrictive and it’s an obstruction of an overseas


market,” says Malcolm Tarling, spokesman for the ABI. “But we have to live by the laws of other lands.” The outlook is hardly more positive with the body more


directly concerned – AIMIP. It reports “no current direct plans” to tackle the issue. The association said: “It is up to the individual AIMIP member to choose how they approach US legislation,


HEALTHCARE, EXPATS AND INSURANCE IN THE US


The US ranks eighth for expatriate income with29% earning over$200,000 and64% reporting that they have more disposable income than in their country of origin(Source: 2010 HSBC Expatriate Explorer survey)


 68% of expatriates in the US think they are spending more on healthcare than they did in their country of origin(Source: 2010 HSBC Expatriate Explorer survey)


The most popular destinations for 18 to 30 year olds considering emigration are Australia, the United States, Canada, Spain and New Zealand(Source: Aviva UK Health)


Healthcare in the US is extremely expensive, making insurance an absolute must-have for expatriates – in 2009 the US spent approximately18% of its GDP on healthcare – twice the proportion of many other Western countries


www.hi-mag.com April 2011


although it may be something that warrants a fact sheet in due course, or at least mentioning at a meeting if it is an area of concern or interest amongst brokers.” Carl Carter, chief executive of IMG Europe, the UK-based affiliate of the US provider, maintains that such subsidiaries have to be extra careful, even if they are regulated by the Financial Services Authority.


“We want to be much more sure that we are within the US regulations,” he says. “Other non-US iPMI companies may often disregard the US regulations as they themselves are outside their jurisdiction – or they steer completely away from the US all together.” Carter says the bar on renewal is emphasised to brokers.


“We always make sure of this, likewise this is highlighted in our application form and likewise at renewal we also have checks to ensure this is appropriate.” Despite that, US insurers with European subsidiaries do not suffer in the round, because they will simply pick up the renewal business that their affiliates cannot. Furthermore, UK affiliates of US companies can angle their sales pitch to suggest that they are best informed on medical practices in the US and have additional incentives to conform with regulations there. None of this helps the Europeans. And


AIMIP is unlikely to pursue the matter with vigour because it’s only the Europeans who would ever complain. The association is still finding its feet: not the time for a split. But there is no denying that the current


playing field of international competition is as level as an Alpine ploughed meadow. Another nail in the special relationship?


HI


Peter Pallot is a freelance journalist and regularly contributes to the Daily Telegraph on international medical insurance and other expat issues


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