The UK's Financial Services Authority (FSA) has given the payment protection insurance (PPI) sector a deadline of March 17, 2006, to comply with concerns over practice in the sector following a meeting between the regulator and the industry.
The PPI market has recently come under severe criticism for pricing, transparency and competition issues from the FSA and the Consumer Association, with a forthcoming Office of Fair Trading investigation into the market on the horizon.
Details of the deadline have been circulated to members of the Council of Mortgage Lenders executive committee in a restricted memorandum. The document says the FSA met with the relevant trade bodies on December 19, 2005 and then in a subsequent letter sets out key messages for the industry to take on board, which read as follows:
The FSA wishes to see improvements to what it deems market failure issues related to ICOB compliance, transparency and product choice.
The trade bodies have until March 17 to introduce concrete self-correcting voluntary measures to address these issues.
Otherwise the FSA will impose its own corrective actions. These could include measures to separate the sale of insurance from core products; or at least better clarify sales processes.