I'm becoming increasingly concerned at the number of offshore insurance providers entering both the payment protection insurance (PPI) market and other insurance markets. Our industry may be aware of the risks associated with non-FSA regulated firms, but consumers certainly are not.
Consumers have no source of redress if they're unhappy with the way their claims are handled or if the firm goes bust. There's no 'safety net' of the Financial Ombudsman's mediation service and no recompense from the financial services compensation scheme.
Firms transacting business outside of the country they're based are having a 'free for all'. No 'big brother' watching over them and plenty of brokers willing to place their business. But beware, brokers' PI cover insists that insurers' solvency is checked.
While consumers are at liberty to purchase whatever insurance cover they like, I believe the insurance industry has a greater duty of care to educate them about the risks they're taking. It should be mandatory for brokers to disclose the insurance provider and country of domicile when presenting documentation (and mechanisms should be in place to enable us to do this).
I'm saddened to see so much business going offshore and I doubt those looking to protect their risks realise that they have in fact increased them.