Standard Life's review of its critical illness policies in 2005 has revealed that the life insurer rejected 18% of claims.

The Edinburgh, UK-based company, which is about to float in a GBP5 billion-valued IPO, said it paid out a total of GBP19.8 million on 342 claims in 2005, and the average claim value was GBP57,800. Overall, 82% of critical illness claims were paid in 2005 compared to 80% at the last full year review.

Of the 18% of claims that were rejected, 10% were declined because the claim did not meet policy definitions and 8% were declined due to non-disclosure, Standard Life says.

We have seen a small but positive shift in the number of claims we paid out on last year and I hope the numbers provide reassurance that we do not arbitrarily decline claims without reason, commented Trevor Matthews, chief executive of life and pensions for Standard Life in the UK.

The new statement of best practice from the Association of British Insurers will provide clarity for advisers and consumers as to exactly what is really covered in these policies. I hope initiatives like this will help reduce the number of declined claims across the industry, he added.