The FSA has ordered all firms selling pure protection to review their sales processes after finding “significant failures” by firms to comply with oral disclosure rules.
Firms have six months to confirm a review has been completed and protection sales processes comply with Icobs. If they cannot comply they will have to write with a plan and timetable of how they will change their processes. The FSA wrote to all firms selling non-investment-related protection “requesting” they carry out a review in a letter dated November 29. In the letter, director of conduct policy Sheila Nicoll says: “We will continue to monitor closely whether the information provided by firm complies with our requirements. Should it come to our attention a firm is not complying, we will consider the extent of the breach and the appropriate regulatory action.”
In June, the FSA published its review of Icobs which came into effect in January 2008. In research with over 1,000 clients and a call-listening exercise with 11 firms, the FSA found companies were not making it clear what was advice and what was information and that product features were explained poorly.