Biba is opposing the FSA's plans to amend the requirement for insurers to provide status disclosure information to retail customers, in an official letter of response.
In a statement Biba said: "It is BIBA's view that the proposals laid out in Consultation Paper 05/14 potentially contradict the FSA's statutory objectives.
"These proposals, if implemented, would result in the loss of some critical information to customers who deal directly with insurers. Lost information would include the full address, regulatory status and how to verify the status, as well as an end to the declaration about the extent of choice on offer."
Biba argues that unless the FSA has clear evidence that customers understand the difference between insurers and intermediaries and it is clear to customers that they are dealing directly with an insurer, the proposed amendments could in fact be in direct conflict with the FSA's statutory objectives.
Steve White, head of compliance and regulation at Biba, said: "The status disclosure information forms an important part of the suite of information customers base their buying decision upon. To remove key elements of this information will inevitably lead to customer confusion.
In addition, the demands and needs statement serves a very useful customer protection role. It gives both parties the opportunity to demonstrate that the customer's demands and needs have been understood and, therefore, that the product being provided is being done so on the correct basis.
"The original decision to include these requirements was based on avoiding customer confusion. We feel that this is best achieved by requiring the same suite of disclosures, irrespective of the sales channel.
"Indeed, with confusion amongst customers still remaining high, despite continued industry efforts to alleviate the problem, a proposal to rely on the policy summary to convey status disclosure information at the moment looks at best misguided and BIBA can see no logical reason at this stage to change it."