Know before you go – is your insurer licensed locally?
For an increasing number of expatriates considering taking up overseas placements, there are now frequent regulatory hurdles to battle when choosing an international private health insurance policy as well as the local health hazards.
According to widely accepted definitions, an admitted expatriate health insurance policy is one offered by a company that has been either directly licensed by the State or indirectly given approval to sell via a partner or an agency, with whom a joint venture admitted policy may have been developed. This usually covers both group and individual applications. A non-admitted policy will not have been approved for sale within the borders of the country concerned and may not be subject to local laws. The designation of an insurance policy as "admitted" may seem to give it a stamp of authority, but this is primarily an administrative designation rather than a mark of quality.
One significant operational distinction between admitted and non-admitted expat health insurance lies in the way claims are made and paid, which can be important for expatriates of all nationalities. Another potentially important difference lies in the area of regulatory protection – admitted policies will be able to take advantage of any local regulatory support in the event of the insurer failing whilst non admitted do not have this extra layer of protection. Thus should an admitted insurer cease trading, the State may use money from a special fund to help pay off policyholders’
Whilst local domestic regulatory protection may appear to be important, UK regulation of insurance providers means that British expat medical insurance companies will adhere to the highest standards anywhere in the world. Allied to the fact that expatriates tend to have more faith in known UK brands, and it can be seen why the domestic UK insurer can and does compete successfully for business globally, even in countries where policies are classed as non-admitted.
For the client, the key fact to establish is whether the policy will be honoured in the territory and whether medical bills will be paid in an emergency. The good news is that in the vast majority of cases, non-admitted policies can be used on the ground every bit as easily as their admitted equivalent. Indeed, as they will have been developed outside of the country concerned, non-admitted policies may carry additional benefits which a domestic insurer cannot offer. Non-admitted companies can often provide insurance coverage that admitted carriers cannot, because of their unrestricted rate structure.
Admitted companies often cannot charge high enough premiums to safely insure high-risk events, but non-admitted providers have no such restriction. As a result, non-admitted companies are usually the only ones available to offer specialty insurance such as passive war cover and genuine international chronic care cover.
Historically there have always been countries where regulations made it difficult or impossible to buy an international plan – Switzerland and the Netherlands being classic examples. However, in what was perhaps a watershed event for the international private health insurance industry, in January 2007 Abu Dhabi introduced strict new legislation requiring expatriates to have a compliant medical insurance plan. Abu Dhabi therefore became one of the first major ‘expat’ hotspots to introduce such legislation and so insurers had to react if they wanted to protect their existing businesses and attract new clients.
The application of local rules reading the sale of policies inevitably varies significantly by territory. In some countries companies have been fined for providing non admitted plans to their staff, whilst individuals in the Netherlands can be penalised for having a non-admitted plan. Expatriate workers in Abu Dhabi cannot obtain a visa without the correct admitted international health insurance plan, whilst in neighbouring Dubai, the rules are not applied with such vigour, at least for the moment.
This inconsistency in the way policies can and cannot be used means it is important for expatriates of all nationalities working abroad to seek professional, regulated independent international insurance advice both on the status of their instance provider and of the policies available. International health insurance brokers, such as UK based Medibroker, have been working with both admitted and no admitted policies for nearly 15 years and have considerable experience of the dos and don’ts. Steve Nelson, international sales manager comments, “With many companies seeking to exploit the huge opportunities in the new economies of China and Russia, as well as established oil rich countries such as Abu Dhabi, the issue of non-admitted policies has become of strategic importance to both employers setting up group schemes and individuals working on a contract basis. Our experience suggests it is usually possible to find a high quality policy provided by a well-known UK brand which will be honoured in the event of a claim. Very often, any inconvenience suffered by the client is limited to a slight delay in the settlement of medical bills. However, as with any complex a costly financial product, it pays to check these details before the policy is bought via an independent expert.”
Medibroker works with a panel of insurers which includes both the bigger household names and also smaller specialist providers. It is often the smaller provides who are in the best position to design bespoke policies, especially where small groups of staff might need cover.
Ultimately, the key role of a health insurance broker remains that of safeguarding and advising their client. Modern private medical insurance policies are now far more complex than ever, so it falls to specialists such as Medibroker to find the right policy for the company and their staff, all at the best possible price.
For more information visit www.medibroker.com
Telephone +44 (0) 191 296 6140
For further information on April Medibroker, please contact:
Guy Stephenson/Erica Evans
Tel: +44 (0)20 8333 9125