A “hornet’s nest” is how one senior compliance greybeard put it. The issue in question is the selling of ancillary and bundled products, which are on the FSA’s radar

We know these products are a lucrative source of income for many brokers, particularly those in the personal lines sector, who rely on such add-ons for a sizeable chunk of their income.

But the FSA has raised concerns over how such products are sold with some of the bigger brokers during the recent wave of Arrow visits.

At the same time, the Financial Ombudsman Service has reported a sharp increase in the number of complaints it has received about specialist insurance products, like mobile phone and wedding cover. There are some common themes, such as how well policies have been explained.

Stung by the public criticism it received in the wake of the payment protection insurance (PPI) debacle, when it was perceived to have been asleep at the wheel while widespread mis-selling was going on, the FSA is adopting a much more front-footed stance on the way that financial services products are designed and sold.

When the FSA swoops, it does so hard and fast these days, as ID theft insurer CPP discovered just a few weeks ago.

Meanwhile, Biba seems sanguine about the issue, happy to wait until the regulator comes knocking on its door.

General insurance brokers have emerged from the PPI mis-selling scandal with an enviably clean bill of health. But the sector can’t rest on its laurels. Brokers must think carefully about the way their products are sold to avoid being tarred with the mis-selling brush.

We must all make sure that, when the next time scandal breaks, there are no insurance brokers’ fingerprints at the scene of the crime.

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