ABI: Payment protection insurance good news for customers
Improvements to payment protection insurance (PPI), such as premium refunds on early loan repayment or cancellation, are giving customers a better deal the ABI (Association of British Insurers) said today.
The ABI is currently working on an action plan for PPI that focuses on raising customer understanding of this insurance; improving the clarity and comparability of policies; encouraging customers to shop around, and improving sales processes and claims experience.
Responding to today’s publication by the FSA of its second review of PPI sales, Stephen Haddrill, the ABI’s Director General, said:
“The FSA recognises the value of payment protection insurance for many customers, and welcomes steps the industry is taking to improve selling practices and transparency. For example, in a voluntary initiative earlier this year, ABI member companies agreed to refund an appropriate proportion of premiums when loans are settled early or the policy is cancelled”.
Peter Tutton, Citizens Advice, said:
“We welcome this work by the ABI to address problems with the PPI sales process as an important first step in recognising that consumers need help to avoid buying unsuitable policies. The guidance should, however, also place the onus on firms to ensure that consumers get this help from their sales staff. We agree that more work needs to be done in this area and Citizens Advice will support the ABI in facilitating this”.
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Notes for Editors
1. Enquiries to:
Alan Leaman 020 7216 7440 (Mobile: 07957 482 330)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Lucy Butler 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler 020 7216 7415 (Mobile: 07968 364 302)
In March this year the ABI announced an action plan on PPI. This focuses on improving customer understanding of PPI; increasing the clarity and comparability of PPI; encouraging customers to shop around, and improving the sales processes and the claims experience.
We are in the process of delivering:
. a consumer guide on PPI, which is subject to consultation until the end of November on our website: www.abi.org.uk
. model wording for sales or policy documents on premium refunds to make it easier for customers to understand how the refund will be calculated and how much they can expect to receive
. training objectives that can be used as a basis for creditor training or for benchmarking existing training
. a model for improved management information
. guidance for consistent claims handling for use by insurers – this was published in June this year.
2. The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.
3. An ISDN line is available for broadcasts.
Copies of all ABI news releases, together with other information from the Association, can be seen on our website http://www.abi.org.uk
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