Measures set out to address competition issues
The payment protection insurance (PPI) market is set to be transformed following the Competition Commission's final report on the controversial policies.
Measures for the product, as set out by the report, include a ban on the sale of PPI by the credit provider at the point of sale or within the following seven days, a complete prohibition on single premium PPI, personal PPI quotes for customers, annual statements and further measures ensuring improved information is available for consumers to make comparisons and searches for other products easier.
The commission said it was introducing the measures due to a lack of competition in the market with customers being unaware that the cover could be purchased other than from the creditor, very little switching between PPI providers and rarely any product comparison made by customers.
Peter Davis, inquiry chairman and deputy chairman of the Competition Commission, said: "These are significant measures carefully designed to address the serious competition problems that currently exist in this market. The 'point of sale' advantage has meant that leading providers have faced little competition for PPI and, as a result, have charged persistently high prices."
In an earlier briefing, Nick Kirwan, assistant director of protection at the Association of British Insurers, anticipated the findings of the report. He said: "There will be quite a lot of remedies involving improved and clearer standardised information for people taking out PPI. And we absolutely support that, we think it is the right thing to do, and we unreservedly say it is a good thing."
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