Lord Turner sends warning shot over mortgage protection insurance
In his address to the Association of British Insurers’ London conference earlier this week, the chairman of the Financial Services Authority (FSA) warned that Mortgage Payment Protection insurance could become of concern to the regulator during the economic downturn.
Lord Tuner observed that with the likelihood of unemployment-related claims increasing “some insurers are responding by increasing premiums or reducing cover for existing policyholders”.
While acknowledging that “it is natural for the industry to respond to changes in risk”, he warned that “this raises issues with both unfair contract terms, disclosure and our TCF Principles”.
Firms were told that this is an area where they must expect FSA intervention to address “poor consumer outcomes”.
The FSA chief also spoke about opportunities created by the financial crisis in the pensions and life insurance based savings sectors.
According to Lord Turner, the savings rate is rising “after a period in which personal savings was heavily focused on the accumulation of housing equity”.
He challenged ABI members to “design and distribute products which enable people to develop a more diversified form of wealth holding than has characterised the last several years”.
Category: ABI News, Financial Services Authority News, Health Insurance News, Insurance News
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