Financial Services Authority lacks understanding of short-term income protection
Mon, 27 Jul 2009
The Financial Services Authority (FSA) and Competition Commission (CC) need to have a greater understanding of short-term income protection (IP) before "tarring all products with the same brush", according to the Income Protection Task Force (IPTF).

The FSA has written to companies suggesting that some payment protection insurance (PPI) and short-term income protection contracts could be deemed unfair under the Unfair Contract Terms legislation because they contain a provision that allows companies 20 days' notice for revising the terms of the contract. In the meantime the CC has attempted to define the sort of PPI where it has concerns and has classified short-term IP in this provisional definition.

Peter Le Beau, co-chairman of the IPTF, said: " Short-term income protection products that provide cover throughout an insured's life but pay for a specified period such as one or two years, should not be tarred with the same brush as products that require regular renewal, at which point terms can be changed or withdrawn, or which contain very short notice periods for significant changes to the terms of the customer's cover and may have significant exclusions."
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