The Association of British Insurers is calling for term assurance to be deregulated in the same way as household and motor insurance because it is “straight-forward, simple and easy to find a wide range of competitively priced products.”
The ABI says the FSA’s review of general insurance regulation, due out next week, must provide a consistent principles-based framework for the selling of general insurance and term assurance should be regulated in a similar fashion.
ABI spokesman Jon French says: “Term assurance is a simple product to understand so doesn’t need to be viewed in the same way as other protection products which are more complex and therefore require a higher level of regulation.”
Royal Liver IFA market manager Andy Milburn says: “On the one hand term assurance should be a lightly regulated, simple to understand product but on the other hand issues such as non-disclosure and whether to place cover in trust make you think the opposite.”
Milburn believes it is important that the ABI gauges the views of advisers before deciding how to proceed on this matter and suggests, if it has not done so already, it should consider this as part of the consultation process.