Financial watchdog says sites must be clear, fair and not misleading.
A Financial Services Authority (FSA) assessment of the insurance comparison website market has found evidence of both good and bad practice, but the regulator is looking for all websites to ensure that users are treated fairly.
The FSA said it will be visiting individual firms to test whether the information they provide is appropriate.
In a review of 17 insurance comparison websites, the FSA found that, although they are all appropriately authorised, there was mixed evidence in terms of the clarity, fairness and accuracy of the information given to customers. The review looked at:
· Whether consumers were encouraged to consider features, other than price, before purchasing products;
· Clarity of the levels of excess that apply to insurance policies; and
· Whether firms have appropriate systems and controls in place for ensuring that key product features included within insurers’ policies are correctly listed on their site and that they correctly relay consumer information to brokers and insurers.
The regulator has provided examples of good and bad practice to help firms meet the standards it expects.
This latest review follows earlier assessments in 2006 and 2007 - when the FSA concluded that no immediate action, other than to follow the development of the market, was required – and responds to the continued growth of the market both in terms of the number of websites and the volume of consumers using them.
Ed Harley, The FSA’s head of financial promotions, said: “We welcome innovation and competition in the rapidly expanding insurance comparison website market. However, we are keen that the market develops in a way that ensures customers are treated fairly, and expect comparison sites to provide information that is clear, fair and not misleading.
“We recognise that many consumers use these websites to search for insurance products. Consumers should shop around for the best deal, but it is important that they compare what’s covered by a policy, and not just focus on the price.”
