The Trade Union Congress yesterday expressed ‘serious concerns’ at proposals for private insurance companies to take over the payment of benefits such as unemployment and sickness.
This is one of the recommendations of the government-commissioned Insurance Industry Working Group (IIWG) report.
The Group is co-chaired by Chancellor Darling and Andrew Moss, Group Chief Executive of insurance giant Aviva and includes leading figures from across the insurance sector.
The report sets out a ‘Vision for the UK insurance industry in 2020’ in a ‘close and effective partnership with government’.
Among the report’s recommendations are:
‘Acting in partnership with the government to explore options to increase savings and protection provision and to help consumers manage financial distress in their daily lives caused by accidents, ill-health or old age.
‘Incentives – using a mixture of incentives (both financial and behavioural) and, in selective cases, appropriate and meaningful penalties to enhance risk protection and savings, thereby reducing underinsurance and individuals’ dependence on the State for benefits.
‘Health coverage – considering alternative options to cover the cost of health services and long-term care, either to cover core services or top up current provision.
‘Protection gap – encouraging people to take positive action to protect themselves and their family against risks and examining whether the insurance industry could provide solutions currently provided by the State.’
TUC General Secretary Brendan Barber said: ‘While the TUC is willing to talk to insurance companies about concrete proposals on welfare state payments, at first sight these proposals raise serious concerns.
‘Who would pay for these insurance policies? National insurance is split between employers and individuals equally, but here individuals may have to take on the whole financial burden.
‘While we all pay the same National Insurance contributions, in private insurance premiums are related to risk.
‘Those who need protection the most would be at risk of going uncovered as they would have to pay the most – this would be the opposite of the welfare state.’
• Meanwhile, a British Medical Association spokesperson said: ‘The drive for commercialisation is continuing, and remains a major threat to our NHS.
‘Since the BMA launched the ‘Look After our NHS’ campaign, we have had a huge volume of emails from doctors who are frustrated with market reforms.
‘They are tired of seeing money diverted from patient care and into the bureaucratic costs of the market.
‘They share the frustration of their patients with the increasing fragmentation of their care.
‘We’d encourage everyone to join us in our call for a publicly funded, publicly provided NHS, based on co-operation and not competition.’
