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Setting standards to improve long-term insurance picture

Whether justified or not, the insurance industry is regarded with a degree


of caut ion and mistrust by many of our customers and this applies to


providers and intermediaries.


Such mistrust is neither good for the consumer, whom it discourages from


making the kind of financial provision they will need for the long term,


nor for our businesses.


We are all familiar with the problems which have led us here – they have


been covered extensively in Money Marketing and other papers. The question


is, what we do about it?


The Saltr (Savings and Long Term Risk) initiative is the industry&#39s


attempt to answer that question. It aims to improve the image and standing


of the industry in the eyes of all our audiences, whether consumers, the


media, the Government or the regulators.


The ultimate objective is, by fostering increased confidence, to grow the


overall market for long-term insurance products.


We cannot achieve this through a simple image makeover. That would


certainly not have secured the support of the industry, including the major


players which have sponsored the project from the outset, nor the IFA


community with whom we have been working to ensure the initiative is


“distribution-neutral”.


It would have been roundly criticised, and rightly, by the Government, the


FSA and consumer groups if it were seen simply as a bit of spin.


Instead, Saltr aims to raise, and be seen to raise, industry standards in


a range of key areas which research tells us customers value – clarity and


comparability of information, appropriateness of products purchased and


customer service.


These new standards will provide real benefits to the consumer. They will


disallow opaque charging structures, require providers to set out their


product details and costs in a clear and directly comparable way and encour


age companies to focus on customer satisfaction with service.


Every standard is being developed in the light of consultation with


providers, IFAs, the Government, the FSA, consumer groups and consumers


themselves.


The standards will not favour any one distribut ion channel.


Saltr&#39s IFA taskforce, chaired by Aifa director general Paul Smee, is


looking at the way the IFA/provider relationship can work best in a Saltr


context.


More work is needed before the standards will be finalised but we are


confident we are on the right track. Consumer research shows that providers


who adhere to these standards, and the IFAs which sell their products,


should enjoy real market benefits.


Saltr&#39s Industry Standards Group, which is made up of representative


companies from all sectors of the industry, is consulting on the standards.


But, for the project to work and consumer confidence to be boosted, the


standards need to be administered by an independent body.


We are, therefore, establishing the Pensions, Protection and Investments


Accreditation Board (PPIAB) which will accredit providers by awarding a new


quality mark at the brand level which companies meeting the standards can


display on their product literature.


The PPIAB will also monitor ongoing compliance. We hope shortly to


announce the name of the chairman and I am confident the body will become a


strong, independent voice, helping to raise standards across our industry.


Saltr will only work if it enjoys the support of providers and


intermediaries alike and we are determined to listen and respond to


concerns and comments from all parties. Our aim is to finalise the


standards by the summer and for the PPIAB to be open for accreditation


business later this year. That is a tight timetable but we are well on


course. The prize – a better deal for customers and a bigger market for the


ind ustry – is one I hope we can all share.

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