But broker body welcomes disclosures in respect of higher risk products
Biba has roundly criticised the FSA’s long awaited consultation paper proposing amendments to its Insurance Conduct of Business (ICOB) rules.
The proposals are the result of the first part of FSA’s effectiveness review and, if implemented, will lead to a fundamental un-levelling of the playing field, according to Biba.
Steve White, head of compliance and training at Biba, said: “We support the FSA’s proposals to increase the required disclosures in respect of the higher risk products, such as payment protection and critical illness.
"However, we are very disappointed that they have chosen to turn off specific rules for insurers for the remaining products, for example in relation to suitability and demands and needs statements.”
White continued: “Biba fundamentally believes that customers should be entitled to the same suite of disclosures, irrespective of where they buy their insurance.
"We have provided the FSA with evidence that customers are confused about the different status of insurers and intermediaries and these proposals will only lead to further misunderstandings.”
Eric Galbraith, Biba chief executive, added: “The FSA recognises that many consumers have a poor understanding of financial matters, as demonstrated by both itsr increased spending on financial capability and its Insurance Made Clear campaign.
"While we fully support these consumer initiatives, we oppose any rule changes that are likely to put our members at a trading disadvantage and which will inevitably lead to greater confusion for the insuring public.”
"Biba welcomes the greater flexibility that the changes will allow firms in meeting their customers’ needs.
“Biba will now use the consultation period to seek views from its membership on the proposed reforms to the ICOB regime so as to ensure that we continue to play a leading and informed role in the debate as it unfolds during the next few months.” Galbraith said.
Biba said it hoped that the European Commission’s forthcoming review of the Insurance Mediation Directive would focus on the quality and quantity of disclosures made to customers, so as to ensure the fairest possible trading environment for its members.