The Retail Distribution Review (RDR) has been the talk of the industry for the past few months par...
The Retail Distribution Review (RDR) has been the talk of the industry for the past few months particularly the regulator's decision not to include protection. Many commentators have expressed their concern at its omission arguing that financial products cannot be dealt with in silos.
However, the Financial Services Authority (FSA) remains firm in its views. During a filming session with COVER (see www.covermagazine.co.uk for full coverage), Andrew Honey, head of insurance at the FSA's small firms division, said the RDR did not include protection because the regulator simply separates products by type and not by what may be asked during an advisory session, arguing that consumers would recognise this. Industry experts begged to differ, with one commentator saying the most important thing is that consumers receive appropriate advice.
While the FSA seems to be adamant in keeping protection out of the RDR, it looks like it will affect the industry no matter what. While separating products by type may sound great in theory, the FSA has to remember that it is rare the advice process can be divided in the same way.
Lack of transparency
In the world of private medical insurance (PMI), Groupama's quest for providers to share their claims statistics for SMEs continues.
The firm, currently one of the few to publish claims statistics for SME businesses, argues that firms failing to do so will breach the FSA's Treating Customers Fairly initiative.
Sharing claims information is normal practice in the general insurance market as well as in the corporate and individual PMI sector. So why is this not happening in the SME market? Commercial sensitivity seems to be the answer - an argument that is rapidly wearing thin on top. My guess is that it will only be a matter of time before the FSA turns its regulatory spotlight onto this section of the market.
