The findings of the latest review of the sale of payment protection insurance (PPI) by the FSA makes sorry reading for anyone involved in this industry.
The FSA has made itself clear as to the outcomes it is expecting, as identified in previous PPI reports. So why has so little progress been made?
Are some firms waiting for the report and resulting recommendations following the Competition Commission’s inquiry before taking any action to address shortcomings in the way PPI is either designed or sold?
In our view, adopting a ‘wait and see’ approach is simply not an option.
It is high time that everyone involved in the PPI industry takes steps to justify the faith that the FSA has shown in the product, by continuing to publicly state that a suitably tailored product can provide valuable protection for consumers.
Yes, improvements have been made – but clearly nowhere near enough. Insurers must look at the design of the product they are providing to distributors.
Distributors must ask themselves whether the product they are selling is appropriate and ensure their sales process meets the expected standards. Is it flexible? Can it be tailored to customer needs? Does it treat customers fairly?
Customers must walk away from a sale, confident that they have bought a policy against which they can claim.
Failure to act now will not only affect the entire industry and potentially cause irreparable damage to its battered reputation, but it will also let the regulator down and – most importantly – fail consumers.
At a time when debt is at an all time high and consumers need the safety net that PPI can provide, how can the industry not act?
Assurant Solutions UK & Ireland