A medical fees policy that looks too good to be true: As one insurer pulls out, Sue Fieldman discovers another all-embracing offer

THERE is a change in the medical fees insurance market this week, with one player moving out because the sky-high cost of claims has made it impossible to offer competitively-priced premiums and another moving in with a policy that sounds almost too good to last.

London and Edinburgh Insurance will no longer be offering its Whole Health policy, which had been sold to about 15,000 people, both in group schemes and individually.

London and Edinburgh has come to an agreement with Private Patients Plan, the second largest medical fees insurer. When a policy comes up for renewal a policyholder can transfer to a similar PPP plan with no additional underwriting terms.

Any claims will be dealt with by London and Edinburgh as usual. Terry Stanley, a spokesman for the company, said: 'During the past few years we have found not only the cost of claims escalating but also the number of claims.

'There are really only two things an insurer can do, increase the premiums or reduce the level of cover. We thought it was unfair to do either.'

Meanwhile, this week sees the arrival of the aptly named Carte Blanche policy. Clinicare, part of the Medical Insurance Agency founded to offer insurance and investment advice to doctors, has teamed up with a French insurer, Strasbourgeoise, to launch a deal that offers cover for almost every conceivable medical treatment including up to pounds 2,400 for a normal pregnancy - which no other policy covers.

It also fills the gap left by some policies and pays up to pounds 1,000 for dental treatment and pounds 200 for opticians' charges for glasses or contact lenses.

Other features not covered by standard medical fees insurance are the payment of private prescriptions up to a maximum of pounds 300, which will delight doctors and consultants who can now prescribe to their heart's content. Private general practitioners also get paid up to a limit of pounds 600 and this includes complimentary medicine.

And there is even a little something for the poor underpaid NHS general practitioners. They get pounds 10 for every referral letter they write to a consultant and a further pounds 10 for completing the insurance claim form.

The Anglo-French alliance obviously wants to keep the entente cordiale with doctors and patients alike. It will even offer cover to those with pre-existing medical conditions with an extra charge on the premium.

A policy that pays for normal pregnancy and only has a 10- month wait from inception of the policy is likely to be overrun next year by pregnant women.

But surely by offering such broad cover they will attract people who will claim at the drop of a hat? There is a danger that claims will go through the roof and premiums will rocket.

Bob Bycroft, a spokesman for Clinicare, says that Strasbourgeoise's long experience in France does not bear this out.

'It is inevitable that we will find ourselves paying claims, but that is the Continental philosophy,' he says. 'The UK philosophy is that you pay the premiums and the company hopes you will not claim.'

For the level of cover provided the premiums are not excessive. A single man aged 40-44 will pay an annual premium of pounds 560.04 for cover for Band C hospitals - the lowest band. The premium for Bupa is pounds 414.60 but the cover is nothing like as broad-based.

Hopefully, Clinicare has pitched its premium at the right level in anticipation of claims.

The Anglo-French venture also offers cheaper policies with more restricted cover.