It became evident at the meeting of the All Parliamentary Group on Insurance and Financial Services held in the House of Commons that the overall liability for payment protection insurance (PPI) mis-selling could reach £4bn. It is predicted that this figure could rise further over the next few years.
In the last few months, The Financial Services Authority (FSA) has come under increasing pressure to force insurers to share the burden of compensation claims resulting from the mis-selling of PPI. It is a widely established fact that the PPI mis-selling had a lot to do with the point of sale from a wide variety of firms including banks and mortgage brokers through to car dealers, dentists, vets etc. While the amount is distinct from the work of the Financial Services Compensation Scheme (FSCS) the figure will undoubtedly be of concern to everyone including the insurance brokers.
The repercussions are not clear and will be several months until there is complete clarity on this. If the insurers are penalised punitively, some of them will have no choice but to pass it on to existing policy holders and will get reflected in the premiums their customers pay. Stuart Boseley, Director of Best Insurance commented that it is vital that the customers who have been sold PPI inappropriately are adequately compensated. The FSCS should not end up penalising the insurers, insurance brokers or the existing policy holders for mistakes of a few.
Stuart Boseley also added that the media has helped customers understand the dis-proportionate amount they pay for their PPI policies. He said, we try our best to be transparent with our pricing so that customers can make an informed choice. There are many firms who advice customers on claiming on mis-sold PPI and force them to cancel their policies, unfortunately many of the customers find themselves exposed when they are made redundant or have an accident or sickness. Hence, customers must not feel pressurised and seek appropriate advice before cancelling their PPI policies. Advice on what to look for in a PPI policy and useful guides can be downloaded from the Best Insurance website.
Best Insurance sells a wide range of income and payment protection policies and is well known as a specialist protection insurance intermediary. The online range comprises of payment protection insurance from MMS, income protection insurance from Alpha. The advisors of Best Insurance are trained to offer Key stone which is a very flexible policy that can be constructed bespoke to match the each customerís unique requirements.
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