Regulator concerned insurers not treating customer fairly
The Financial Services Authority (FSA) has called in insurers over rapidly rising Mortgage Payment Protection Insurance (MPPI) premiums and restrictions in cover, the FT reports.
The FSA was concerned over “poor consumer outcomes” in the MPPI market. “Whilst it is natural for the industry to respond to fluctuations in risk, the recent changes in premiums and cover raise concerns over unfair contract terms, disclosure and the FSA’s Treating Customers Fairly principles,” the FSA said.
Premium have risen as much as 70% and insurers have imposed significant reductions in cover.
The FSA would not disclose what was discussed at the meeting, held last week, but said it was “seeking to reach agreement across the industry that will ensure MPPI customers are treated fairly”.
The trade bodies, including the Association of British Insurers (ABI), the Council of Mortgage Lenders (CML) and the British Bankers’ Association (BBA), declined to comment on the FSA meeting.
