After the Dilnot Commission published its report on long term care funding yesterday, the FSA said it will actively monitor the new long-term care products in the market.
The Commission on Funding of Care and Support chaired by economist Andrew Dilnot, published its report yesterday.
The report has recommended capping the individual cost of care to £35,000 and increasing the means-tested threshold to £100,000 from the present £23,250. It has also suggested capping the general living costs to between £7,000 and £10,000 a year.
The recommendations should help open up the financial sector to develop new long-term care market product, said Dilnot. The development of new products for the long-term care market was deterred as they faced uncapped liability on costs.
Margaret Cole, the FSA interim director for the conduct business unit said the FSA had close interests in the development of private sector solutions to care funding in a letter dated July 1 to the Dilnot Commission.
“We will be active in supervising the development of new products, especially in light of previous problems with pre-funded long-term care insurance. Indeed, under our consumer protection strategy, we intend to increase our focus on product design and governance more generally, to try to avoid customer detriment”, she said.
“We are also happy to be involved in working groups to consider improvements to the standards of advice for products that meet care fees funding needs. Such products can be complex and consumers may need additional protection”, she added.
The long term care products market was complex and products ran the risk of offering inadequate cover depending upon the state benefits provided along with the insurance, the FSA had observed in 2003 in a consultation paper on the regulation of long term care insurance.
It was also found that long-term care products were expensive and was generally bought by the rich.