The Financial Service Authority's (FSA) proposals for the regulation of general insurance could seri...
The Financial Service Authority's (FSA) proposals for the regulation of general insurance could seriously damage sales in the private medical insurance (PMI) market. That is the view of PMI broker body the Association of Medical Insurance Intermediaries (AMII).
The AMII's formal response to the FSA's Consultation Paper 160 outlined a number of concerns over the FSA's proposals, including the introduction of a risk-based approach to the regulation of different products.
The AMII said classing PMI plans as 'high risk' products, as proposed in CP160, will have a negative impact on sales.
Stephen Walker, specialist PMI broker at Medical Insurance Services and a member of the AMII, said he was compiling an official response on behalf of the broker body.
'Private medical insurance products have been lumped in the high risk category with investment products such as endowments. The FSA is using the wrong terminology ' if private medical insurance is labelled as high risk, it could affect sales,' he said.
However, Walker feared if the industry pushes for more relevant regulation for PMI products, it may generate extra cost which would have to be absorbed by policyholders.
He added: 'It appears the FSA is using existing systems to cut down on costs. If we push for additional specific regulation, it will cost more and will end up being borne by the industry, which will ultimately mean higher premiums for products.'
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