The issues statement identifies the specific questions and areas the CC believes are relevant in deciding whether any feature of the market(s) for PPI products restricts, distorts or prevents competition. It will be used as the basis to guide collection of evidence including the first round of hearings with interested parties during the period May to July 2007.
PPI refers to insurance services supplied for the purpose of protecting a borrower’s ability to maintain credit repayments in the event that the borrower becomes unable to maintain the repayments due to circumstances which may include any of accident, sickness, unemployment, and, in some cases, death. This market reference follows a super-complaint from Citizens Advice to the Office of Fair Trading (OFT).
The full statement is available on the CC website at: http://www.competitioncommission.org.uk/inquiries/ref2007/ppi/index.htm and identifies a number of issues relating to competition including market definition, understanding the retail and wholesale market(s) for PPI (including competition between providers), the interaction between these markets (vertical issues), the role of intermediaries and indicators of the extent of competition.
The issues statement is not meant to be seen as implying that the inquiry group has identified any competition concerns—the CC has yet to reach any conclusions on this inquiry. The purpose of the issues statement is to inform all interested parties and give them an opportunity to raise any further points with the CC.
The CC will continue to work closely with the Financial Services Authority (FSA) to ensure that its investigation takes into account the FSA’s ongoing work to remedy problems relating to selling standards and ensuring that customers are treated fairly, as well as various industry initiatives in response to the FSA’s work.
Although the statutory deadline for the inquiry is 6 February 2009, the inquiry group aims to complete its investigation more quickly than that and expects to publish its next publication— the ‘emerging thinking’ document—in the Autumn. A full administrative timetable for the investigation is available on the CC website.
The CC would like to hear views on the issues statement from all interested parties, in writing, by Friday 11 May 2007. To submit evidence, write to:
The Inquiry Secretary (PPI market inquiry)
Competition Commission
Victoria House
Southampton Row
LONDON
WC1B 4AD
Or email: [email protected]
