The recent results of the Office of Fair Trading (OFT) and the Financial Services Authority (FSA) investigations into PPI propose to refer the PPI market, including MPPI, to the Competition Commission to investigate selling practices within the industry.
Paymentshield has reminded intermediaries to be aware of the guidance issued in the latest PPI reviews to ensure they comply with existing rules when advising customers on MPPI products. It has highlighted some of the most relevant points raised by the regulator and put together a checklist to reassure intermediaries who may be worried about advising on the product in light of the recent investigations. It
Intermediaries need to check that:
- Customers understand the limitations of the policy as well as the benefits
- Eligibility is checked before application
- Customers are made fully aware of any parts of the policy under which they may not be able to claim
- For advised sales, firms recommend suitable policies that meet demands and needs
- They assess whether existing cover is in force and taking this into account in the advice process
- They ensure that a tailored demands and needs statement is given to the client and retained on the client record
- They ensure that customers understand what a ‘pre existing’ medical condition is and the importance of disclosing such
- Customers are aware of significant and unusual exclusions and limitations and know where to look for more information.
“We hope that our checklist will help advisers to feel more confident about advising on MPPI, by emphasising the main points they have to be aware of in the advice and sales process. There are a variety of reports out that highlight that MPPI is a valuable and important product for consumers and it is important that the recent reports do not result in fewer intermediaries willing to advise on the product.”
