ABI Back Commission Consultation On PPI Cover

by Stewart Douglas

Story link: ABI Back Commission Consultation On PPI Cover

The Association of British Insurers has today announced its support for the Competition Commission’s consultation strategy over the much-scrutinised payment protect insurance and how it is sold to consumer buyers throughout the UK.

The body responsible for voicing the views of much of the insurance industry, the ABI, today said that the Commission’s consultation into the service, particularly in relation to levels of competition and practices within the market, was a welcome step towards ensuring ongoing regulation and seller support.

The way in which payment protection is sold to consumers has come under intense scrutiny from financial regulator the FSA as well as the media and market analysts, in light of studies showing significant failings on the part of the insurance companies behind this type of product.

With many individuals been missold, or buying cover without even the knowledge of how it operates and the limitations of any given policy, the FSA has sought to crack down on lax practices within the industry in order to ensure a fair, regulation-compliet trading environment.

Now is the turn of the Competition Commission to launch their own consultation into the area in order to more closesly establish the dynamics of the market.

Speaking today on the consultation, ABI spokesperson Nick Starling said that whilst PPI makes up a vital part of consumer cover, providing adequate support in the event of certain policy triggers, it is nevertheless important to ensure that the market itself is living up to the standards expected by consumers, and market outsiders.

Payment Protection Insurance provides cover in certain circumstances for missed mortgage repayments, usually as a result of long term illness or sudden unemployment, yet it has come under close scrutiny precisely as to how it is sold to consumers.