Industry
Government ministers have warned that the complexity of the insurance market and lack of clarity in financial services could serve to further diminish consumer confidence in the sector.
Reacting to delegates during the MP Question Time at the Association of British Insurers' Conference, Vince Cable MP, Shadow Chancellor of the Exchequer for the Liberal Democrats, said some areas of financial services, such as mortgage protection insurance, were of particular concern. He said: "The insurance industry is very complex and there are potential damaging issues in the mortgage protection market. Should the housing sector crash, a lot of consumers will be caught out and left unprotected. Lots of solutions lie in the hands of the industry effectively self-regulating."
Attacks were also levied at the Government's approach. David Willetts MP, Shadow Secretary of State for Work & Pensions & Welfare Reform, said the Government needs to move away from 'naming and shaming' before permanent damage is done to the sector. "The Government has gone too far. It doesn't realise what it is doing to financial services," he said.
When asked if the Financial Services Authority (FSA) should be responsible for educating consumers, Stephen Timms MP, Financial Secretary to the Treasury, agreed that financial services and debt advice education does need to be explained, especially in schools, and stressed that FSA regulation was indeed important to boosting confidence in the sector.
"Organisations such as the Financial Services Compensation Scheme, the Financial Ombudsman and the treating customers fairly initiative are all doing important work," he said.
