Broker pressure provokes regulator to produce best practice guide
The FSA is to produce best practice notes for insurers on the make-up and content of policy summaries following pressure from brokers.
Complaints from brokers, backed up by Biba, about the size and inconsistency of the documents insurers are producing has provoked an investigation by FSA supervisors.
Biba regulation and compliance manager Steve White said: "These documents need to be summaries. We have seen examples of 10 to 15 page documents. Documents this long are absolutely ridiculous."
He added: "This is a very positive way that brokers have looked at regulation, seen something that needs changing and then done something about it."
As policy summaries are not a formally defined document under the Insurance Mediation Directive, the FSA has only ever issued general guidelines on what is required.
The new best practice notes are expected to be much more prescriptive.
An FSA spokesman said: "Policy summary documents are an absolutely central component of the customer service package.
"We will want to see what the industry is doing. The problem seems to be that there is a huge mixture of types of summaries with variable quality."
The FSA is expected to produce the best practice notes toward the end of the summer.