U-turn by Financial Services Authority in protection total premium row
Tue, 17 Mar 2009
A controversial Financial Services Authority (FSA) directive which will force providers and advisers to tell clients the total premium of a protection policy over its lifetime is being reviewed.

The Association of British Insurers (ABI) has come to an agreement with the regulator and will be conducting research to find out how consumers would prefer to see the cost of insurance expressed over the expected policy term. Also, it will consult on and develop a "consistent and timely approach to implementing" the directive and effectively rule out a blanket introduction.

Initially the move was introduced for mortgage payment protection insurance (MPPI) sales in July last year, but was extended in December to cover individual life, income protection (IP) and critical illness (CI) policies.

Nick Kirwan, ABI assistant director of health and protection, said: "This should result in more consistency in how premiums are presented, which will make it easier for advisers and consumers to make comparisons when they shop around. The outcome of our discussions with FSA is a good compromise for consumers and advisers."
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