FSA and Payment Protection Insurance - the latest

United Kingdom

The FSA has now published the record of its 31 July 2006 meeting on the Payment Protection Insurance market held with trade associations. This meeting is the third of three meetings between trade associations and the FSA on this topic.

The first meeting (December 2005) was held to consider industry actions to address compliance failings and wider competition issues identified by the FSA and the OFT in the PPI market.

The purpose of the second meeting (April 2006) was to discuss the responses received on issues raised during the first meeting. The responses focused mainly on:

1. improving information provided to consumers;
2. improving the eligibility checks during the sales process;
3. supporting training and competence; and
4. reviewing of the original sales process where a policy is cancelled.

The latest meeting on 31 July summarised the progress made by the trade associations and the FSA so far. An example of such progress is a draft consumer guide on information to consumers that has been produced by some of the trade associations. The FSA has provided comments on this and proposes to involve consumer organisations, such as the Citizens Advice Bureau in this review.

The FSA acknowledged that the wider competition issues and more fundamental issues in the market still remained to be addressed.

Many of the trade associations expressed concern on the short time scale between the recent publication of the OFT’s report and the feedback session on the report scheduled for the 24 August 2006. The OFT confirmed that although it would like written comments to be submitted before the 24 August, it will continue to consider comments received after this date.

The following publications are expected to be published in September 2006:

  • The trade associations’ timescales for implementation of changes for firms; and
  • FSA’s report on Phase 2 of its thematic review (this will also include an update on the work in relation to refunds for single premium policies).

The trade associations and the FSA have agreed to hold a meeting in mid-September before the publication of the FSA’s report.

For the record of the meeting, please click here.