Financial Services Authority demands review of protection advice
Thu, 02 Dec 2010
The Financial Services Authority (FSA) has written to all firms that advise on protection products requesting that they review their sales policies and procedures.

It has taken this step following a review published by the regulator of advice on insurance products, which found "significant failures" particularly in critical illness .

The letter, to compliance officers, dated 29 November, said firms should review sales policies and procedures for compliance with insurance mediation rules and present written confirmation within six months that it has been completed. According to the letter, regulatory action may be taken if the FSA believes a firm is not complying.

The letter says: "On 30 June 2010 we published our post implementation review (PIR) of the Insurance Conduct of Business Sourcebook (ICOBS) that came into effect on 6 January 2008. The review found significant failures by firms concerning oral disclosure in sales of protection products, in particular Critical Illness Cover (CIC). These findings were disappointing, particularly as oral disclosure rules were introduced in ICOBS, following the shortcomings identified in our thematic review in 2006: The sale of critical illness cover : results of thematic work."
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