Pension term assurance (PTA) is likely to be sold under ICOB as well as COB rules, it has been revea...
Pension term assurance (PTA) is likely to be sold under ICOB as well as COB rules, it has been revealed.
Financial Services Authority (FSA) spokesman Robin Gordon-Walker confirmed the proposal is expected to go through - although the authority's board has yet to approve it.
He said: "The FSA plans to allow PTA to be sold under ICOB and we expect the proposal to be approved.
"The only thing we need now is for the board to sign it off."
Jason King, managing director of Life Policies Direct, was in favour of the move.
He said: "This is an important change to the rules, otherwise we would have ended up with a two-tier protection system that would have benefited no one and eroded consumer value.
"A large proportion of protection sales are made by ICOB-regulated advisers and to rob them of the ability to advise and sell PTA would have restricted the market for no reason and certainly would not have helped reduce the protection gap."
King added that advice would be crucial if the rule-change went ahead.
He said: "One note of caution, however, is that I believe PTA should be an advised sale as there will be important differences between ordinary term and pension term that consumers will need to be aware of.
"Only an advised sale process will be able to ensure consumers don't make the wrong decision."
The FSA board was expected to take a decision on PTA on Thursday 23 February.
