FSA
Customers buying insurance without advice need proper guidance to help them make an informed choice, said Andrew Honey, head of department of the Financial Services Authority's (FSA) Small Firms Division.
Honey argued that customers need to understand the products before they buy them. "People buying protection on a non-advised basis should be given sufficient information to make an informed purchasing decision.
"Both insurers and brokers must help to ensure that customers understand the policies they are buying." Honey added that customer complaints should be dealt with "promptly and fairly".
The FSA is investigating sales of payment protection insurance (PPI) to find out whether firms are treating customers fairly. It seems, Honey said, that the regulator had found that some sellers imply that PPI is compulsory. "This could lead to unsuitable products being sold," he said.
Honey added that the FSA had also found that many PPI policies had a wide range of exclusions. "We are definitely going to try to improve standards in this area of the market," he said.
Honey revealed that the FSA also plans to look at the how CI policies are sold. A number of issues surround these policies, he said. "It is frequently unclear how often these policies are reviewed. Claims handling is also an area of dissatisfaction."
