MPPI firms agree to refund £60m to clients following FSA concerns
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The Financial Services Authority and mortgage payment protection insurance providers last week agreed an industrywide package of measures for consumers including refunds of around £60m.
The industry has acted in res-ponse to the FSA’s concerns about recent increases in premiums along with reductions in what customers are covered for.
The regulator’s concerns were based on the terms that allowed policy changes to take place and how these were disclosed.
Following discussions initiated by the FSA with relevant trade bodies and some companies, the industry has now agreed to refund increases in premiums and reverse reductions in cover for customers who have seen such changes to their policies this year.
The agreement includes an offer to reinstate policies if customers cancelled within two months of an increase in premium or a reduction in cover.
It will also freeze premiums and cover of existing customers for the rest of this year at least and amend MPPI contracts to ensure clients are made aware of the circumstances in which firms have the right to vary premiums and cover.
Jon Pain, managing director of supervision at the FSA, says: “We welcome this move which will put customers back where they were before their policies were changed.”
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