An industry expert has called for greater engagement by the protection industry to prevent regulation of payment protection insurance (PPI) hurting the protection market.
Steve Devine, chairman of trade body Protect, has warned the industry not to underestimate the magnitude of the FSA and Office of Fair Trading's current consultation regarding PPI.
He feared the potential side effects of its outcome and urged protection industry members not to miss the brief opportunity to respond.
"It is a really big threat," he told COVER.
"I don't think people realise how big the scope is and I'm worried they will think ‘It's just PPI bashing and nothing to do with us'.
"It's not very long and in danger of being overlooked, especially as at first glance it appears to be about PPI products.
"But they could include existing and new personal accident and sickness policies and anything else covering life events, accident, sickness, unemployment, and other unspecified risks," he added.
Devine raised fears that the ambiguous nature of the consultation may leave providers and distributors uncertain of the future and noted that it included the introduction of product regulation.
"What certainty will providers and distributors get that their products are included or not in the scope of this consultation and when will they get it?" he asked.
"The consultation document contains a draft product risk report - the first dawn of a new era in product intervention by the regulator.
"Debt waiver, cancellation, and suspension products are defined as non-insurance products, however the FSA have since backtracked from this bold stance and in a consultation workshop an official said the status was being reviewed, but he believed it was not insurance."
All this could have a knock-on effect to the Treasury's simple savings and protection product investigation, Devine concluded.
The joint FSA and OFT Payment Protection Products consultation closes on January 13.
