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McAteer says ICOB proposals likely to be detrimental to consumers

Consumer advocate Mick McAteer says the FSA’s proposed changes to the ICOB regime will be detrimental to consumers and the market rather than ensuring their needs are met more effectively.

In a report commissioned by Unum, McAteer says consumers will be worse off because the proposals put income protection products at a disadvantage potentially making them more difficult to access.

He says: “The FSA’s product categorisation undoubtedly disadvantages the IP sector. Categorising IP in the same group as products such as Critical Illness Cover and Payment Protection Insurance does not correlate well with the comparative risk of consumer detriment associated with the different product types. Which?, for example, is clear that IP is a priority protection product for consumers and that CIC/ PPI represent a greater risk for consumers.”

McAteer also questions how the FSA came to its proposals claiming the FSA’s research was not rigorous enough to justify its conclusions and believes the regulator is being too hasty and should be taking the Retail Distribution Review, the Law Commission’s work and the Competition Commission’s investigation into PPI into account.

He says the short consultation period for the proposed changes, which ended yesterday, did not provide enough opportunity for thoughtful response.

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