Following discussions between the ABI and FSA, the regulator has given the trade body control over the development and implementation of the FSA’s requirement to disclose the total premium for individual life, income protection and critical illness policies.
The move means providers concerned over the requirement, a clause in the European Distance Marketing Directive, need not make changes to their current sales process until the ABI has conducted a piece of consumer research.
Once the ABI come up with a suitable approach, it will then be recommending an implementation timetable.
The FSA says the timescale will allow firms a reasonable time for implementation taking account of the scale of the required changes.
ABI assistant director of health and protection Nick Kirwan says: “The outcome of our discussions with FSA is a good compromise for consumers and advisers, as well as for insurers offering life, critical illness and income protection insurance.
“We’re looking to do some research to find out how consumers would prefer to see the cost of insurance expressed over the expected policy term. This should result in more consistency in how premiums are presented which will make it easier for advisers and consumers to make comparisons when they shop around.”
Bupa Individual protection product development and marketing manager Steve Casey says: “We are delighted that after the initial maelstrom, the ABI & FSA have
worked hard together to bring about a sensible way ahead. We look
forward to working with the proposal to ensure that what is presented to
the customer is what they want & need, in order to make informed
Originally, pure protection providers and distributors were asked to disclose the total premium over the expected term of the policy by January 15 2009, or as soon as possible after that date.