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‘Mortgage firms are missing out’

Mortgage firms could be missing out on a lucrative sector with over 600 firms yet to apply for general insurance regulation, says the Association of Mortgage Intermediaries.

The FSA confirms it has had 10,212 applications to transact GI business and 9,700 have been given authorisation.

AMI director Chris Cummings says: “General insurance is a very important secondary activity. There is every reason to get on the bandwagon. These are profitable new avenues for mortgage intermediaries.”

Cummings says the Financial Ombudsman Service is already expressing concerns that the low-risk status of mortgage advice may change. He believes the FOS is expecting PI premiums to rise as there may be more complaints about protection sales with mortgages.

With mortgage firms selling protection as a secondary activity, Cummings believes there may be the temptation to approach it less thoroughly.

The AMI is also trying to dispel misconceptions of the general insurance market. For example, a number of introducers believe they can pass on protection leads as an unregulated activity.

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