PAX Scheme members should note that a replacement Personal Accident Insurance Scheme will be introduced on 1 June 2023, for which they will need to apply if they wish to maintain Personal Accident Insurance cover. It is anticipated that the new contract will cover similar benefits and may be with the existing supplier or with a new supplier entirely.
Existing PAX insurance policies (which are held on a one-month rolling basis) are due to end on 31 May 2023.
New members can still join the existing Personal Accident Insurance Scheme (PAX) up until the contract expires on 31 May 2023. Claims already notified will continue as normal and if an insured event occurs on or before the policyholders cover end date or 31 May 2023 (whichever occurs first) and is then notified to insurers in accordance with the time limits within the Policy Documentation, then these will also be assessed in accordance with the relevant terms and conditions.
Detail
This article gives details of the action MOD is taking to ensure that a new contract will be in place for the Personal Accident Insurance Scheme (including any optional life and critical illness benefits) and Life Insurance Scheme contracts and how it will affect individuals with regards to their insurance policies. A replacement for both PAX Personal Accident and PAX Life will be introduced on 1 June 2023 which will provide similar benefits. The DIN also outlines what action Service personnel will be required to take once the new Personnel Accident and Life insurance Schemes are introduced on 1 June 2023.
Background
There have been times when Service personnel have experienced difficulty in obtaining commercial insurance cover similar to that available to the general public due to the nature of their employment and the war risks associated with conflict situations. In keeping with the Armed Forces Covenant, MOD is committed to ensuring that Service personnel are not disadvantaged in their ability to access privately arranged personal accident and life insurance due to their employment. This approach is currently managed with two products:
- Personal Accident Insurance
- Life Insurance
PAX is the current commercial provider of personal accident and life insurance schemes available to Service personnel. Membership is entirely a matter of individual choice, as is the level of cover for which they pay their premiums.
Notice of a replacement of Personal Accident and Life Insurance Contracts
MOD has now reached the point where it must replace the Personal Accident Insurance Scheme and Life Insurance Scheme contracts. The new insurer will be confirmed before the current contracts expire to ensure a smooth transition.
Exercise Period (February 2023 to May 2023)
During the exercise commencing February 2023 and until the award of the contract is announced (May 2023) an existing PAX member who holds a policy or anyone who intends to take out a personal accident policy during this period will be covered under the terms of their current policy under the PAX Scheme, provided they continue to make payments.
Action: None Required
Transition Period
Current Scheme Members: Following the announcement of the award of the contract (expected in May 2023) a transition period will begin. Current PAX members will continue to be covered by their current insurance policy until 31 May 2023. All current PAX members will be given the requisite notice of the date of termination.
Action: Current Members will need to consider if the new Scheme’s policy terms and conditions are suitable for their needs (this may be with the existing or new provider). The current PAX policies, including any optional life and critical illness benefits held under the current policy plan, will end at 23:59hrs (GMT) on 31 May 2023. Before 00:01hrs (GMT) on 1 June 2023 Service personnel will be required to have taken the following action if they wish to remain covered for personal accident insurance.
If the existing provider (PAX) retains the contract, Service personnel will need to consider whether the new terms and conditions of the new policy will still meet their needs. Full information on alterations will be given to members and they will have the opportunity to make any changes or even cancel their cover without penalty. If they are content, they will be able to continue with the same number of units of cover at the start date under the new terms, together with any enhancements. We are seeking to move to direct debit payments with any further insurance provider in which case Service personnel will be responsible for the arrangement of this, including under any contract with PAX.
However, if a new provider becomes the appointed contractor, then Service personnel will have to consider whether the new providers’ policy’s terms and conditions are suitable for their needs. If so, they will need to apply for cover to begin on 1 June 2023. Further details will follow once the winning contractor is announced.
Potential Members: Service personnel without Personal Accident Insurance cover during the transition period may apply to PAX for the level of cover they require. Their policies will end on 31 May 2023.
Action: Potential members who have taken a personal accident insurance policy out during the transition period will be required to take the same action as described in Para 7.
Transition Period
Current Scheme Members: Following the announcement of the award of the contract (expected in May 2023) a transition period will begin. Current PAX members will continue to be covered by their current insurance policy until 31 May 2023. All current PAX members will be given the requisite notice of the date of termination.
Action: Current Members will need to consider if the new Scheme’s policy terms and conditions are suitable for their needs (this may be with the existing or new provider). The current PAX policies, including any optional life and critical illness benefits held under the current policy plan, will end at 23:59hrs (GMT) on 31 May 2023. Before 00:01hrs (GMT) on 1 June 2023 Service personnel will be required to have taken the following action if they wish to remain covered for personal accident insurance.
If the existing provider (PAX) retains the contract, Service personnel will need to consider whether the new terms and conditions of the new policy will still meet their needs. Full information on alterations will be given to members and they will have the opportunity to make any changes or even cancel their cover without penalty. If they are content, they will be able to continue with the same number of units of cover at the start date under the new terms, together with any enhancements. We are seeking to move to direct debit payments with any further insurance provider in which case Service personnel will be responsible for the arrangement of this, including under any contract with PAX.
However, if a new provider becomes the appointed contractor, then Service personnel will have to consider whether the new providers’ policy’s terms and conditions are suitable for their needs. If so, they will need to apply for cover to begin on 1 June 2023. Further details will follow once the winning contractor is announced.
Potential Members: Service personnel without Personal Accident Insurance cover during the transition period may apply to PAX for the level of cover they require. Their policies will end on 31 May 2023.
Action: Potential members who have taken a personal accident insurance policy out during the transition period will be required to take the same action as described in Para 7.
Benefits provided by the Department – Armed Forces Compensation Scheme
MOD provides cover for death and injury attributable to service under the Armed Forces Compensation Scheme. However, Service personnel may wish to purchase personal accident or life insurance to supplement the benefits already paid through the Armed Forces Compensation Scheme (AFCS).
PAX membership is optional and it does not affect Service personnel entitlement under the Armed Forces Compensation Scheme.
Questions and Answers
Q1. Will Service personnel be left without personal accident and life cover when MOD’s contracts with the current provider ends?
A1. MOD is arranging for personal accident and life products to be in place from the time the current contracts end. If the existing provider (PAX) wins the contract, it is still not possible to transfer automatically to a new policy plan as there may be differences within the plan which the individual will have to agree to. This means it is important for current PAX members who wish to remain insured to agree and sign up to the new policy plans terms and conditions. However, if a new provider wins the contract, then Service personnel will have to consider whether the new provider’s policy terms and conditions are suitable for their needs. They will be required to apply for cover for insurance with the new provider.
Q2. Why is this happening? Why is the contract running out?
A2. The existing contract is coming to an end. This is an opportunity to review current arrangements to ensure that they are appropriate for the current and future requirement of the Armed Forces.
Q3. When will the details of the new scheme be announced?
A3. It is hoped to announce the details in May 2023.
Q4. Will my PAX Personnel Accident insurance policy cover (including optional life and critical illness cover) end on 31 May 2023, even if the existing provider wins the Contract?
A4. Yes, your current PAX Personal Accident policy cover (including any optional life and critical illness), which operates on a one-month rolling basis, will end at 23:59hrs (GMT) on 31 May 2023. If you wish to ensure that there is no break in cover you will need to ensure you are covered by the new arrangements which will begin at 00:01hrs (GMT) on 1 June 2023. This may be with a new provider or the existing provider. If the existing provider (PAX) wins the contract, then you will need to decide if you are content with the terms and conditions of the new policy as there may be some changes including a possible price difference. If content, you can continue to be covered with the same amount of units and all that will be required is to set up a direct debit for payment of their premiums. If a new provider wins the contract then (again after considering their terms and conditions of the policy) you will need to apply to the new provider for cover to begin from 00:01hrs (GMT) on 1 June 2023.
Q5. Will my SLI 365 Life Insurance and/or PAX Life insurance policies terminate on 31 May 2023, even if the existing provider wins the contract?
A5. Existing SLI 365 and PAX Life members will still be covered for Life Insurance until the end of their policy term which could run on for 25 years provided premiums continue to be paid.
Q6. What happens after 31 May 2023 if I wish to purchase Personal Accident or Life Insurance cover?
A6. Service personnel who require Personal Accident or Life Insurance cover after 31 May 2023 will need to apply for Personal Accident or Life insurance cover under the new scheme(s) arrangements.
Q7. Does MOD have any details about what the new personal accident and life scheme(s) will look like or who the provider(s) will be?
A7. No, not yet. MOD is currently in the process of selecting scheme provider(s). Service personnel will be informed as soon as details of the provider(s), and new products are available.
Q8. Could the scheme end completely if no suitable bidder comes forward?
A8. MOD is confident that the current exercise will identify a suitable insurance provider or providers. The MOD remains committed to ensuring that appropriate personal accident and life insurance remain available to Service personnel.
Q9. What transitional arrangements will be put in place?
A9. Details of the transitional arrangements will be issued when details of the new schemes are announced. Service personnel will be given timely information on the new arrangements to allow for an informed choice and will include details on how to apply when the new products are introduced.
Q10. Will it cost me more money?
A10. Premiums could be the same, higher or lower, depending on the bids received.
Q11. Will my legal claims cover continue after 31 May 2023?
A11. The legal claims cover ends on the 31 May even for events that occurred before the 31 May as cover is on a ‘claims made’ basis