The FSA says including protection products on the menu for investment firms would place general insurance firms at a competitive advantage and would result in different disclosure requirements for different firms selling the same products.
Whole-of-life products do come within the menu due to their investment element but term insurance does not.
Axa Life press officer Peter Webb says: “Intermediaries can now choose the remuneration model that best suits their business.”
Plan Invest group joint managing director Michael Owen says: “If the public get used to the menu, they may demand that protection is included but the FSA seems to be working towards a level playing field everywhere they go.”
Chadborn Baker & Kearle adviser Peter Chadborn believes the exclusion of protection products may cause confusion. He says: “This is a thorny issue. Customers need to know where they stand. This could be sending out mixed messages.”