Since going through my emails and dumping the investment reporter’s junk back on his desk I’ve discovered the FSA has published its latest report into Payment Protection Insurance. They say many firms are still misselling PPI but says they’d better watch out because it’s cracking down.
FSA managing director of retail markets Clive Briault says: “We have, on a number of occasions, set out clearly our requirements for the selling of PPI. While some progress has been made by the industry we are extremely disappointed that some firms have still made little progress in improving their sales practices. We will now strengthen our action against firms who fail to treat customers fairly when selling PPI.”
Since the FSA’s investigation started two years ago 11 firms have stopped selling PPI either permanently or temporarily, until they get their sales processes in order. Three firms have cancelled their FSA authorisation to sell PPI and four firms are reviewing past PPI sales to ensure they were appropriate.
Meanwhile protection heavyweight Legal & General announced it has abolished the consumers’ ongoing duty of disclosure. This basically means consumers no longer have to notify L&G of any changes to their health or circumstances between the time they submit their protection application and when their policy starts.
L&G is the first insurer to scrap the requirement and has done so on its term assurance, whole of life, critical illness and income protection policies.
Industry practice requires consumers to advise on any changes to answers on their application form until their cover commences. Advisers welcome the move claiming it brings practice inline with consumer assumption.
L&G claims and underwriting director Russell Whitworth says: “A customer is not covered until their policy starts and this could be months after they have completed the application form. We have taken the opportunity to bring our practice in line with the expectations of our customers and remove this ongoing responsibility to disclose information, which is often seen as a burden to them.”
Oh and the Pru launched it’s new product with a song and dance in South Africa which I’m sure you know all about. From what I’ve heard advisers are appreciating the plan’s more competitive price, the severity-based model and its abillity to pay out up to three times the sum assured.
But some feel the Vitality element should be an option rather than a compulsory bolt on because those who are attracted to the plan for the afore mentioned reasons but are more couch potatoes than gym junkies will probably see their premiums rise. But perhaps deterring the unfit is the idea.