The FSA has issued four questions for the protection industry as part of its Consulation Paper 10/8.
The pure protection paper, which forms part of the regulator's Retail Distribution Review (RDR), applies only to sales of term assurance, critical illness cover, and income protection products.
The proposals apply to firms that give both investment advice and provide advised and non-advised services for pure protection.
However, they do not apply to firms who sell or advise on pure protection but do not give investment advice.
The questions are:
Q1: Do you agree that we should change our rules that allow firms to elect to sell pure protection under COBS so that they can do so without applying the Adviser Charging rules to their pure protection business?
Q2: Do you agree with our proposals for increased remuneration transparency for sales of pure protection products associated with investment advice?
Q3: Do you think our alternative proposal to require remuneration transparency according to the permissions held by a firm, rather than the circumstances of the transaction, is preferable?
Q4: Do you have any comments on our draft rules and guidance, particularly our guidance on the circumstances when a pure protection service is considered to be associated with investment advice?
Responses should reach the regulator by 28 June, and a final policy statement is expected to be issued in September.
