Clive Briault, managing director of retail markets at the FSA, has revealed sales of regular premium MPPI are generally compliant with FSA rules, although other sectors selling PPI are continuing to perform poorly.
In a speech at the Chartered Insurance Institute annual conference, Briault said: “We have just completed a series of visits to look at PPI selling practices in firms ranging from high street banks to motor dealers and small mortgage intermediaries.
“We are also undertaking mystery shopping work and will be feeding back the results from the mystery shopping and firm visits later this year.
“Our findings from the firms visits are variable. Some firms demonstrated good compliance with our rules – they were addressing problems that may have existed in the past, such as checking that customers are eligible for the policy before selling it.
“For example, we found that regular premium PPI sold with prime mortgages seems generally compliant with our rules. However, selling practices in other sectors were very poor”
Graham Boulger, group commercial director at Paymentshield, says the findings indicate that a FSA review of MPPI selling might not be on the cards.
He says: “This backs up what we have been saying for some time and hopefully alleviates mortgage advisers concerns that there will be a wide ranging FSA review of MPPI.
“There is no evidence of systemic mis-selling of MPPI but there is reluctance from mortgage advisers to sell MPPI at the moment because of the media attention focused on loan payment protection.
“What Briault says is absolutely true when he draws the analogy with travel insurance.
“The MPPI market is the only PPI sector where there is open market competition between lenders and intermediaries and this results in consumer choice.
At the same time, the competitive pressures ensure that premiums and commissions are kept at acceptable levels. The same cannot be said for loan PPI.”