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Pension Term Assurance to be available under ICOB rules

The FSA is preparing to issue a consultation paper on pension term assurance proposing that it should be sold under ICOB rules.

Contracts can currently only be sold under COB rules, thereby limiting its distribution or requiring ICOB advisers to vary their permission in order to advise on it.

From A-Day next year, it will be possible for a client to write their single life term insurance product under a pension wrapper, giving them tax relief on the premiums they pay.

Concern was first voiced in MM from both IFAs and providers who believed the current regulation of PTA under COB rules would prevent many clients from profiting from the benefits posed by A-day.

Further details on the consultation paper are expected in the very near future.

FSA spokeswoman Abi Jones says: “Yes, I can confirm that the FSA is proposing to put out a consultation paper on PTA being sold according to ICOB rules in addition to COB rules. It will be subject to additional protections.”

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