First insurers get mark of approval

Scottish Equitable, Norwich Union, Scottish Widows, the Co-operative Insurance Society and UNUM have become the first insurers to be accredited under the raising standards quality market initiative, introduced by the independent pensions protection and investments accreditation board (PPIAB).

The PPIAB expects half the industry to be accredited by the end of 2002 and by displaying the mark of quality, providers will be able to prove they provide clear product information, will refund premiums if the product is unsatisfactory and offer satisfactory customer service. Groups will only be able to use the quality mark once they have met a stringent set of standards.

Mary Francis, director general at the Association of British Insurers (ABI), said: 'The commitment required in terms of time, resource and energy is considerable, and is proof of how demanding the standards are. Higher standards will lead to greater consumer confidence which, in turn, will lead to higher levels of savings for the future.'

The move for quality standardisation will prove beneficial to IFAs. According to the PPIAB, the standards will help IFAs by providing a common framework for product explanations, literature and charges. This will make it easier to explain the benefits of specific products and services to clients.

Scottish Equitable has spent £1m ensuring that its systems and marketing products are able to cope with the proposed changes.

Lesley McPherson, public affairs manager at Scottish Equitable, said: 'The main impact of the standards will be on marketing material at the point of sale and if an IFA has clearer material it will be easier to explain the products. Consumers may not be familiar with the product they are buying, for example, the difference between critical illness and income protection, so the standards will make it easier to work with them. There will be no small print as it will all be explained in the text.'