FSA gives PPI industry March 17 deadline to make improvements
Biba has urged brokers to take advantage of the crackdown on the payment protection insurance (PPI) market by offering better value products than the traditional providers.
The call comes as the FSA gave trade bodies representing the PPI industry until 17 March to prove to the FSA they will clean up their acts.
The trade bodies include the Council of Mortgage Lenders (CML), the British Bankers Association and the Finance and Leasing Association.
Biba is calling for the PPI covers to be sold separately from the loan and credit card products they relate to - known as de-linking.
Biba chief executive Eric Galbraith said: "We want to see PPI unbundled.
"This would create more opportunities for brokers to sell the cover more competitively. There are some bad practices in the sector and we want to take the moral high ground.
"We have called for an end to single premium policies, which are often added on to loans, with customers ultimately paying interest on the cost of insurance."
Galbraith added: "We need to raise awareness so that the public realises that, like travel insurance, they can buy PPI elsewhere."
The FSA's deadline is understood to have been leaked in a secret CML memo.
Broker Simon Burgess of British Insurance said: "The trade bodies are extremely concerned about losing market share, but this is a real opportunity for brokers."
An FSA spokesman said: "We have found there are problems with this market and will be doing further reviews between April and June to see if there is improvement.
"The answer may be that PPI needs to be de-linked from the product it is sold with, to create a more competitive market. If the industry won't do this, then we will need to impose a rule change."
The spokesman added: "We're working closely with the Office of Fair Trading which is expected to announce the scope of its market study on PPI soon and will make an announcement this autumn on whether further regulation is required."
