Mortgage payment protection insurance providers not treating customers fairly
Mon, 15 Jun 2009
The Financial Services Authority (FSA) has revealed that it has concerns about the way in which insurers are treating customers who have bought mortgage protection products.

At a recent conference of the Association of British Insurers (ABI), the FSA chairman, Lord Turner, said that the regulator was prepared to intervene where treating customers fairly (TCF) was not being applied to customers who bought mortgage payment protection insurance (MPPI). He said that it had come to his attention that 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.

Lord Turner explained: "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."

According to the FSA, such actions raise issues of unfair contract terms and disclosure and breach TCF principles.
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