The Association of British Insurers (ABI) has claimed that its Code of Practice has led to a fall in the number of critical illness policyholders, who are having their claims turned down.

Customers of critical illness cover - a form of life insurance that pays out a sum if the policy holder can no longer earn a wage though work - are receiving a better service thanks to a Code of Practice, which has been formulated by the ABI, according to the organisation.

The Financial Ombudsman Service also noted that the critical illness industry had experienced a fall in the number of complaints. The statistics show that the Ombudsman received fewer complaints about critical illness and among the complaints that it did receive, the insurer was found to be acting fairly in a larger number of cases.

Nick Starling, the director of general insurance and health at the ABI, said that this trend was a "direct result" of the Code of Practice. "The code looks at the way claims are dealt with where people failed to tell their insurer about a relevant piece of information when they applied for their policy," he explained.

Mr Starling also added: "This is good news for consumers. It means people can be confident that when they buy a critical illness policy, they know it will pay out if it is needed."