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Income protection providers not treating customers fairly

FSA - Financial Services Authority

Insurance regulator FSA is concerned about the way insurers are treating customers who bought mortgage protection products.

 

FSA chairman, Lord Turner says the regulator is prepared to intervene where Treating Customers Fairly (TCF) is not being applied to customers who bought mortgage payment protection insurance (MPPI).

 

Some MPPI providers have been reducing cover and increasing premiums at a time when consumers are most likely to need the protection they have bought.

 

Turner says, "While MPPI has not previously been a major focus of our concerns, it may become one in an economic downturn. As the likelihood of unemployment-related claims increases, some insurers are responding by increasing premiums or reducing cover for existing policyholders. Such actions raise issues of unfair contract terms and disclosure, and breach TCF principles. This is an area where insurers must expect us to intervene to address poor consumer outcomes."

   

Income protection insurance: News update: 13/06/2009

 

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