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ABI supports abolition of age 70 rule

The Association of British Insurers is supporting the abolition of the age 70 rule on protection products.

The FSA’s consultation on the rule is due to end on September 6 and providers and trade bodies are expected to call for its abolition.

If the rule is scrapped, Icob advisers will be allowed to sell policies maturing beyond age 70 as these can only be sold by Cob advisers at present.

The ABI supports the general principles of abolishing the age limit and 10 year term restrictions. But it believes that all except one of the investment whole of life products should continue to be regulated under Cob as they still hold significant investment risk.

The only protection products the ABI says should be sold under Icob are those whole of life and fixed-term products which are pure protection products with no investment element or where the investment element is non-profit.

ABI director of life and pensions Chris Kenny says: “The age 70 rule has made it much harder for an increasingly significant group of people to buy life and protection insurance. We are pleased that the FSA is taking steps to change this situation, but we don’t believe that either of their options gets the balance quite right between consumer protection and wider consumer choice.”

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