Paymentshield is warning intermediaries to apply due care with MPPI products following the latest reviews of PPI.
The provider insists that the same rules must apply when dealing with mortgage-related products as do standard loan repayment insurance.
The recent results of OFT and FSA investigations into PPI propose to refer the PPI market, including MPPI, to the Competition Commission to investigate selling practices within the industry.
Paymentshield has put together a checklist to reassure intermediaries who may be worried about advising on the product in light of the recent investigations.
Advisers must check that:
– Customers understand the limitations of the policy as well as the benefits
– Eligibility is checked before application
– Customers are made fully aware of any parts of the policy under which they may not be able to claim
– For advised sales, firms recommend suitable policies that meet demands and needs, they assess whether existing cover is in force and taking this into account in the advice process, ensure that a tailored demands and needs statement is given to the client and retained on the client record and they ensure that customers understand what a ‘pre existing’ medical condition is and the importance of disclosing such.
Paymentshield sales and marketing director Chris Traynor says: “The recent FSA and OFT publication will have undoubtedly made intermediaries more apprehensive about advising on and selling MPPI.
“While we are disappointed that the PPI investigation has failed to pick up the way that the vast majority of the mortgage intermediary market works in selling regular premium MPPI, we think the market now has to concentrate on making sure that advisers are continuing their important work in ensuring customers have sufficient protection in place.
“It is important that the recent reports do not result in fewer intermediaries willing to advise on the product.”