View more on these topics

Banks will have to ensure clients are eligible to claim

Banks and building societies must ensure customers are eligible to claim on insurance policies sold with packaged bank accounts under proposals put forward by the FSA.

Last week, the regulator published a consultation paper on new insurance conduct of business sourcebook rules for general insurance and protection policies sold as part of a packaged bank account.

A packaged bank account is typically a current account bundled with a range of insurance policies and access to preferential terms for services such as mortgages and overdrafts. The customer often pays a monthly account fee.

The FSA wants consumers to be able to make an informed decision about insurance sold as part of a packaged bank account. It also wants to limit the risk that consumers rely on the policies, only to later find out they are unable to claim. It is proposing that banks and building societies take reasonable steps to establish if a customer is eligible to claim on the insurance sold.

Firms will have to provide customers with an annual eligibility statement which sets out claim criteria and recommends customers review their circumstances and whether they would be able to claim. Firms selling on an advised basis will also have to consider the suitability of the insurance. Firms will have to keep a record of the suitability assessment and the eligibility assessment for at least three years.

The FSA estimates one-off costs to banks and building societies for implementing these rules will be £21m, with £13.5m worth of ongoing costs annually.

London & Country sales director Michael Aldridge says: “It is important to ensure there is depth in banks’ fact-finding to assess suitability. Banks and building societies have in the past not necessarily always been the best at properly assessing the suitability of their products.”


No LV= fund managers to join Threadneedle

Threadneedle Investments has announced that no fund managers from LV=Asset Management will be joining the group following its £8bn outsourcing deal. Money Marketing revealed that key LVAM managers Graham Ashby, Paul Kim and Richard Timberlake were not joining Threadneedle last month. In August, LV= announced that it had agreed a deal with Threadneedle to outsource […]


Lender behind Lifemark loan deal pulls funding

The US lender behind a $150m loan facility to take Lifemark out of administration has withdrawn its funding offer ahead of a bondholder meeting to vote on the loan next week. Money Marketing revealed in August that Keydata founder Stewart Ford (pictured) had arranged the loan to cover outstanding premiums at risk due to Lifemark’s […]


Federation of Small Businesses to launch Nest rival

The Federation of Small Businesses plans to launch a low-cost pension scheme which will be made available to its 200,000 employer members. The trade body is developing the FSB pension scheme with pension provider Scottish Widows and IFA firm Independent Financial Services. FSB national policy chairman Mike Cherry says: “When auto-enrolment into pensions comes into […]


TSC MPs hit out at ‘hollow apology’ from Sants

Treasury select committee members have slammed Hector Sants’ “hollow” apology over the FSA’s pre-emptive rejection of the committee’s RDR report. The report, published in July, called for a one-year delay to the January 1, 2013 implementation date and for a softening of the cliff-edge deadline for experienced advisers. The FSA released an embargoed response alongside […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm