Insurer to sell creditor cover direct in a bid to avoid regulation problems
Pinnacle Insurance is to shift sales of its creditor insurance from field-based representatives to direct sales, to meet FSA guidelines.
The insurer said it is impossible to be FSA compliant while selling policies through hundreds of thousands of third party salesmen.
Pinnacle sales director Roger Humber said the problem was one of scale. "There are over 40,000 salespeople carrying literature for just one of our major partners. At the point of sale they then go on to sell credit insurance. It poses a huge problem for regulation."
The insurer will continue working through lenders, but plans to move the point of sale for its £100m book to follow-up contact, made after a customer has taken out a credit agreement.
Humber said: "The problem is nobody has thought further down the line - to long distribution channels. This is the area that the FSA and everybody else just hasn't thought through."
The change in distribution will take responsibility for meeting FSA regulation away from the army of sales staff used by lenders, to a few centralised points directly controlled by the lenders.
Humber said: "Our main thrust is to keep working with the lenders and we will support them in selling creditor insurance direct to their customers."