The FSA is to consult on whether protection policies maturing beyond age 70 should be regulated under investment rules as now or be allowed under general insurance rules.
The consultation could open up the sale of policies under Icob rules rather than purely under Cob rules as with investment contracts. The age limit was origin- ally introduced in the Financial Services Act 1986 to ensure that term policies of more than 10 years were regulated as investments if they provided for a term which took the average person beyond the age at which they were expected to die at the time beyond age 70. The FSA is now suggesting two options for change. Option 1 is raising the age 70 condition to age 80. Option 2 is to remove the age and 10-year term condition, meaning that firms would no longer endure two regulatory regimes. It would also mean that whole-of-life plans without a surrender value or where the consideration consists of a single premium and the surrender value does not exceed that premium, could be sold under Icob rather than Cob. The FSA says the benefit to consumers is that pure protection contracts will be made more widely available to those consumers with a protection need beyond age 70. It says that, with this change, consumers will no longer be given information about commission payments and projection rates. Advisers would be required to recommend a suitable product rather than the most suitable product. Scottish Widows protection marketing manager and Association of British Insurers chairman of the protection working party Nick Kirwan says: “This is a pointless hurdle for consumers. Personally, I think they should remove the age limit altogether. Older consumers are more vulnerable and there is a lot of detail to understand behind this rule.”Recommended
Christine Farnish set to leave NAPF for Barclays
National Association of Pension Funds chief executive Christine Farnish is leaving for Barclays at the beginning of October.She will take the role of public policy director at the bank following four years as ceo of the NAPF.The NAPF says she has strengthened the Association’s reputation as the leading voice in workplace pensions and has helped […]
This week in Protection
Last week saw one of the highlights of the protection industry’s calendar, both professionally and also socially, if the aftermath at London nightclub Tiger Tiger was anything to go by.
Correspondent’s week
This week by Jo Thornhill, personal finance correspondent, The Mail on SundayThe week starts with a frantic search for a case study, a common Monday morning exercise. This time, it is the tricky issue of the child tax credit. Claimants have been receiving renewal packs and the National Audit Office is due to deliver a […]
Hit the trail, Bradshaw tells protection providers
Financial services veteran Paul Bradshaw says the protection is the last outpost of up-front commission and is urging providers to build trail into sales. Bradshaw, guest speaker at the Protection Review dinner in London last week, said the only way for intermediaries to provide adequate reviews and support to customers on protection policies is if […]
Are low interest rates a concern to you and your corporate clients?
Catriona McInally, business development manager, explores how your corporate clients can manage their cash deposits and maximise returns without compromising security and liquidity. Read more
Most Read
- Top trends
Newsletter

News and expert analysis straight to your inbox
Sign upLatest from Money Marketing

FCA to crack down on ambulance chasers
Claims management companies must be more specific on separate permissions and competency when they under the remit of the FCA, according to HM Treasury. Under rules proposed in the Treasury’s latest consultation paper, claims management companies will operate under six sectors – housing disrepair, industrial injuries disablement benefit, personal industry, financial products and services, criminal […]

Martin Tilley: Keeping on top of Sipp proposition dilution
Knowing what assets each operator will accept and with what conditions is becoming increasingly difficult The recent well-publicised events concerning Sipp operator asset acceptance have focused the mind of a number of advisers. We have been fielding enquiries about our own Sipp and the asset classes we as a Sipp operator would consider. But this […]

Fears over investment trust sales as new disclosure hikes costs
Investment trust sales may come under pressure due to new EU rules, experts have warned. The potential benefits of gearing on investment trusts risk being overlooked as new cost reporting rules make them look more expensive compared with open-ended funds. Traditionally, closed-ended funds have looked attractive based on lower costs compared with other structures, as […]