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FSA says advisers are falling short on MPPI disclosure

The FSA has issued further clarification on the Icob requirement around total premium disclosure for mortgage payment protection insurance after research found many firms disclosing only monthly premiums.

Research by the regulator found some firms’ interpretation of total premium to be inconsistent with the FSA’s requirement, leaving consumers unable to “make an informed decision” when purchasing a policy.

As a result, the FSA is now providing further clarification of the ICOB requirement to disclose total premium for MPPI and other general insurance and protection products.

A statement from the FSA says: “In our view the disclosure of total premium will be necessary to put the customer in a position to make an informed decision. The disclosure of the monthly premium alone is not sufficient to enable consumers to make an informed decision.

“We do not accept that it is safe to assume that consumers can readily grasp from a statement of monthly premium alone the nature of the overall financial commitment proposed. We consider that the sales discussion is not balanced if consumers are only given the monthly premium to weigh up against the information the firm gives on the benefits of the product, which consumers are asked to relate to protecting a loan that covers a much longer period of time.”


Caught on the opt

I read something the other day about the auto-enrolment of 10 million employees into pension saving in 2012. You probably already know the plot of this future horror story by heart. Ten million employees who currently do not receive a pension contribution from their employer will be swept into voluntary pension saving by legislation. The pension saving will be voluntary in the sense that if they do not want to save in a pension, they will be allowed to opt out of auto-enrolment.

2009 Forecast to be the year of income

BNY Mellon Asset Management head of distribution Paul Feeney believes the UK fund industry may contract by 20 per cent in the credit crunch and that 2009 will be the year of income.

Charcol close to completing restructure

John Charcol has taken out a new debenture loan while its company accounts and annual returns remain overdue but the firm says its restructure is “almost complete”.


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