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FSA set to axe age 70 rule

The FSA will scrap the age 70 rule on protection policies regulated under Cob rules, which will allow Icob advisers to sell policies maturing beyond age 70, according to several product providers.

The regulator’s consultation period ended on Wednesday and responses from providers, advisers and trade bodies are expected to call for the abolition of the rule.

The FSA originally suggested two options – scrapping the rule or raising the age 70 condition to 80.
Zurich UK protection development manager Gerry Warner expects the FSA to abolish the rule and says he would be surprised if it raised the age.

Warner says: “My only concern might be that if you have these products in your armoury, then Icob advisers will be able to advise on IHT planning. Cob advisers understand the tax implications well but would all Icob advisers have that same expertise to operate in the IHT regime?”

If the rule is axed, providers say it will open up the marketplace for conventional non-profit whole-of-life plans and pure protection whole-of-life plans to Icob advisers.
Scottish Widows head of protection development Johnny Timpson says the age 70 rule is obsolete and he wants for the FSA to scrap it.

Timpson says: “The rule is obsolete and it would make management of our salesforce a lot easier if it was removed. We would not have to think in terms of Icob and Cob advisers.
“It also provides an opportunity for Icob advisers to talk to customers about whole-of-life cover which may help reverse the falling sales of these policies in recent years.”

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