Jubilee, the specialist Lloyd’s insurer, has broadly welcomed the joint Financial Services Authority (FSA) and Office of Fair Trading (OFT) final guidance on Payment Protection products as an important move forward in rebuilding consumer confidence in PPI.*
Jubilee became involved, as it is a long-established underwriter of payment protection insurance. The company’s bulletin said it “passionately believes in the value of these products and is committed to actively developing a range of customer-focused offerings that meet the needs of consumers in the post-PPI mis-selling era.”
David Swan, Senior Mortgage Underwriter, Jubilee Syndicate 5820, commented: “The past PPI mis-selling scandal has had a huge impact upon the public perception of the product and has led to many distributors withdrawing completely from offering any insurance protection on mortgages or other financial commitments.
“It is now time for providers to look forward with products and sales methods that will rebuild the confidence of consumers and regulators alike. This joint FSA and OFT guidance Paper can only help distributors and insurers move forward with confidence.”
Jubilee stressed that it “believes that the emphasis being placed on ensuring the right products are provided for the right target market is an important provider imperative. Swan added: “In our view, this need to understand the target customers when designing product terms and features is not just a requirement for compliance but makes commercial sense.”
“Firms need to recognize that this is not just a requirement at product design stage but needs to be measured reviewed by the insurer and distributor throughout the product’s lifespan to ensure it is achieving the correct consumer outcomes,” Swan added.
He also pointed out that Jubilee has welcomed the clarity provided on the use of debt waiver products as a replacement for PPI, indicating, that the “fact that facilities including debt waiver or debt freeze provisions are unlikely to be classified as insurance, addresses the considerable doubt and argument there has been previously over this issue.
“It is now up to lenders and finance intermediaries to utilize such products in a responsible way and avoid any possibility of a repeat of the previous PPI abuses.”
Source: Jubilee Group (a part of Ryan Specialty Group, LLC)
*IJ Ed. Note: The investigation into “mis-selling” of payment protection insurance (PPI) by UK banks was launched in 2006. It has resulted in a number of legal claims and in new regulations, which were introduced in September 2012, to stop the practice. The banks have by and large conceded responsibility, and – as the article notes, the emphasis for both banks and insurers is to restore lost consumer confidence.