Improvements to payment protection insurance (PPI), such as premium refunds on early loan repayment or cancellation, are giving customers a better deal the ABI (Association of British Insurers) said today.
The ABI is currently working on an action plan for PPI that focuses on raising customer understanding of this insurance; improving the clarity and comparability of policies; encouraging customers to shop around, and improving sales processes and claims experience.
Responding to today's publication by the FSA of its second review of PPI sales, Stephen Haddrill, the ABI's Director General, said: “The FSA recognises the value of payment protection insurance for many customers, and welcomes steps the industry is taking to improve selling practices and transparency. For example, in a voluntary initiative earlier this year, ABI member companies agreed to refund an appropriate proportion of premiums when loans are settled early or the policy is cancelled”.
Peter Tutton, Citizens Advice, said: “We welcome this work by the ABI to address problems with the PPI sales process as an important first step in recognising that consumers need help to avoid buying unsuitable policies. The guidance should, however, also place the onus on firms to ensure that consumers get this help from their sales staff. We agree that more work needs to be done in this area and Citizens Advice will support the ABI in facilitating this”.
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