BIBA opposes FSA fee disclosure proposals
by Gill Montia
Story link: BIBA opposes FSA fee disclosure proposals
The British Insurance Brokers’ Association (BIBA) has expressed strong views on the Financial Service Authority’s (FSA) proposed new treatment of fee disclosure to consumers, in respect of lower risk or “other” general insurance products.
The Association has called the plans “a licence for the unscrupulous to hide charges”.
In its consultation paper, the FSA proposes a differentiated approach to insurance conduct of business regulation, for protection products and other general insurance products.
The changes are aimed at furthering the principles-based approach to conducting insurance business, which BIBA fully supports.
However, Steve White, BIBA’s Head of Compliance and Training, believes that “The removal of the need to separate a fee from the premium when selling a lower risk product to a consumer is an extraordinary proposal, particularly given the FSA’s scrutiny of commission disclosure in the commercial market at the moment.”
BIBA has also raised concerns over a number of other proposals in the consultation paper, including: the classification of private medical insurance as a low risk product; the deletion of the inducements rule; the removal of the requirement to provide a policy summary and the removal of demands and needs statements for insurers.
Eric Galbraith, BIBA’s Chief Executive, has stated that “BIBA fundamentally believes that consumers should be entitled to the same set of disclosures, irrespective of where they choose to purchase insurance and we are very disappointed that the FSA does not agree.”