Plans to further develop the UK care insurance market have been agreed by the Association of British Insurers and the government
At a Social Care Summit today, the ABI and the Department of Health issued a joint statement of intent, which sets out steps on how they will work together alongside the implementation of the Care Bill.
Both pledged to 'help people get the information and regulated advice they need to plan and make decisions, and create the right conditions for a larger market of financial products which will give people more choice.'
They said the statement was based on the view that long-term care provision would increasingly become an integral part of wider retirement planning.
The ABI noted that the market for long-term care insurance is currently limited, but should adapt as the number of consumers looking for such products grow.
Otto Thoresen, the ABI's director general, said he expected the insurance industry to play an important role in developing solutions to help people fund their long-term care needs.
'We have supported the introduction of a new care funding model, and believe the Care Bill provides a sustainable framework for both industry and consumers,' he added.
'The statement of intent sets out our commitment to working with the government to create the conditions for the development of an insurance market that offers a range of products to help people meet their long-term care needs.'
Care minister Norman Lamb said the current care and support system 'doesn't work' and is 'hugely unfair'.
'People face losing almost everything they've worked hard for or being forced to sell their family home in a time of crisis to pay for the care they need.
'Our reforms will not only stop this from happening but will provide the industry with the certainty it needs to develop products that can help people plan for the future. I welcome this commitment from the industry and am excited to see how they take on the challenge of helping transform the way we pay for our care.'
Commenting on the joint statement, Jules Constantinou of the Institute and Faculty of Actuaries, welcomed the 'sensible co-ordination' between government and the insurance industry.
But he added: 'The new social care regime, which comes into full effect in April 2016, will improve the present regime for care, but it should be noted that the new cap on care charges will not work as a cost limit in the way that people might expect. The cap will apply to "care", not to residency or any top-up care costs. As such it does not represent an absolute payment 'stop' point, rather it limits some elements of the costs that individuals and their families will face.
'Actuaries work in the health and care, pensions and life industries. We believe that unlocking the value of retirement savings in some way to fund care would recognise that people do not plan ahead for this need. This would offer a degree of future proofing as subsequent generations find they are faced with a growing list of savings requirements and limited money to fund these needs. We will be releasing research later this year, some of which should offer some interesting ideas on how this could be achieved.'