This email was sent to Money Box subscribers on 24 September 2011

Dear Listener

LUCID is an annual event for underwriters, doctors and insurance companies to discuss issues around – well – insurance. I was invited – to Cardiff this time – to sit on a panel on Wednesday with Ombudsman Melissa Collett as well as Directors of Aviva and Legal & General and Swiss Re’s head of claims. Tim Dickinson, the affable host from Swiss Re, got 100 of the audience to stand up and then made numbers of them sit down to represent those refused life cover, refused it on normal terms, accepted and then one solitary figure left was the one person among the hundred who had claimed – ie died. It was a graphic illustration of how insurance is priced and refused and there was a lively debate about cherry-picking and the structure of what the industry likes to call ‘protection’ – critical illness, income replacement, and life cover. Finally we were all asked for one change we would like to see. The industry reps said they wanted to have zero declines – ie everyone who claimed is p  aid. Already both Aviva and L&G insist that they do sometimes pay claims even when their re-insurer won’t reimburse them if it ‘feels right’. Finally, we were asked to name one change we would each like to see in the insurance industry. Easy peasy. End commission on insurance sales. Commission will end on new investment sales from 1 January 2013. Mortgage commission is under review. So eventually the conflict of interest between customer and insurance sales person will have to go too. And if anyone doubts that I will just say three letters. PPI.

 

No real news about the Government’s plans to ameliorate its changes to women’s State Pension Age. There will be some transitional provision and it will focus on being ‘fair’. But beyond that we do not know if it will be a change to the timetable set down in the Pensions Bill which will leave some women waiting an extra two years to the age of 66 (see table here http://news.bbc.co.uk/1/shared/spl/hi/programmes/money_box/transcripts/spa_changes.pdf) or if it will be a more modest plan to allow women affected by the delay to claim Pension Credit even though they have not reached pension age. But we do know that changes to the Pensions Bill will have to be published by 13 October and the Bill will be debated in parliament for the final time on 18 October. So not long to wait now…

 

***IN MONEY BOX THIS WEEK***

 

The biggest fall in stock markets for, well, a couple of years. But it really does feel like a multi-faceted global crisis with the Euro under threat, the US in a political stalemate over its $14.7 trillion debt, and the UK economy in a phase of low growth and high inflation. As the value of shares falls,  rises, falls, plummets, and then stays flat wondering where to go next we ask what is happening to the world’s economy – or at least our bit of it?

 

Pre paid plastic cards – which we looked at briefly last week in the context of Ryanair – are a growing business. They are marketed as being like cash and a way to avoid running up debt. But in fact you can go ‘overdrawn’ with them even if you check there are funds to pay your bill.

 

Restaurant chain ASK is being accused by two waiters of making them pay for losses out of their own money. ASK denies the charges. We find out what the rules are when customers do a runner or a credit card slip is lost. What can waiters legally be asked to pay?

 

You get the opposite of what you pay for. At least that is the conclusion of research into a large sample of investment funds. Those with the highest charges performed the worst while those with the lowest performed the best. FundWeb expands on its research and a high charging fund responds – we hope. All the funds mentioned are very reluctant to come on to do so.

 

When Sarah sold a mattress on eBay and the money was paid into her PayPal account she was happy to let the buyer take it away a few days later. But some weeks after that the money was taken out of her PayPal account and she could not find out why. When is money paid into PayPal ‘certain’?

 

If you are in your twenties with a condition that means you probably won’t see 60 is a pension any use to you at all? Advice for a young man with Muscular Dystrophy.

 

We will try to squeeze all five into our 24 minutes. Find out what we manage on Radio 4 at midday, or at 9pm on Sunday, or online anytime, or get the podcast at www.bbc.co.uk/podcasts/series/moneybox. On our website www.bbc.co.uk/moneybox you can follow links, download transcripts, or send us stories or ideas you want us to look into. And Have Your Say on how waiters are treated by restaurants.

 

This newsletter is available at bbc.co.uk/moneybox/newsletter around the time it hits your inbox (tell your friends who don’t subscribe). And you could join more than 11,750 people who follow me on Twitter to enjoy (or rant about) my random but timely thoughts on money and a few other things whenever I’m awake at twitter.com/paullewismoney.

 

Best wishes,

 

 

Paul

 

PS I will be previewing Money Box on BBC One Breakfast on Saturday around 0845 and I am on Breakfast in the week, usually on Thursdays and usually around 0640 and 0820 talking about a money story and answering emails and tweets. But the time, and occasionally the day, can vary.

 


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