Research into PPI by the trade body showed 80 per cent of respondents were in favour of a ‘baseline’ PPI offer that has set terms, including a minimum deferred period for payment of benefits and minimum levels of cover.
With the FSA taking a keen interest in the PPI market following its mystery shop of the sector in 2005, and the Office of Fair Trading (OFT) currently undertaking a market study of the sector following a super-complaint by Citizens Advice, Rob Griffiths, associate director at AMI, said establishing a baseline product would help rid the stigma attached to PPI.
He said: “The establishment of a baseline product will give increased confidence and assurance for those consumers purchasing PPI contracts. AMI is fully supportive of a move to a baseline specification and is engaging with the industry to arrive at such a product.”
David Quick, managing director at CETA, said: “Developing a PPI baseline product would certainly be a start and make brokers more comfortable with what they are selling. However it needs quite a bit more from the OFT and the FSA in letting the public know exactly what is good and what is bad.”
The AMI March census revealed widespread support for the ‘de-linking’ and ‘de-bundling’ of PPI products. 92 per cent were in favour of ‘de-linking’ a PPI product so clients could take out PPI cover from a provider separate to their mortgage provider, while 93 per cent supported ‘de-bundling’ PPI, so each benefit could be sold separately.
