The latest Mortgage Intermediary Census on Payment Protection Insurance (PPI) reveals there is widespread support for the "de-linking" of PPI from associated mortgage products and the "de-bundling" of the individual elements of accident, unemployment and sickness.
Published by the Association of Mortgage Intermediaries (AMI), the March Census showed 92% of respondents supported “de-linking”, which would allow customers to choose a PPI provider which is separate from the lender, and would mean PPI would not be compulsory with any mortgage scheme, allowing advisers to compare the terms available from different PPI providers.
Figures from the survey, also revealed 93% agreed with the idea of “de-bundling””, which allows each benefit to be bought separately, as appropriate to the customer’s sick pay or other relevant circumstances.
AMI says sales of PPI have been high on the Financial Services Authority’s (FSA) agenda since the results of its mystery shopping exercise into the sector last year, while the Office of Fair Trading (OFT) has also launched a market study to look in-depth at the sector.
This follows a super-complaint from Citizen’s Advice last year, and AMI says it is expected both the FSA and the OFT will work closely together on this issue, meaning the industry has been “put on notice” to improve PPI sales practices, and urged to consider changes to the PPI products available.
Rob Griffiths, associate director of AMI, says the PPI market is certainly in transition at the moment, and it seems clear from the Intermediary Census results that AMI members are in favour of the development of fairer, more transparent products.
He adds: “Support for ‘de-linking’ and ‘de-bundling’ of PPI products was almost unanimous and the introduction of these changes will have a positive impact on the suitability of PPI as a protection product. AMI will continue to represent the views of its membership to the FSA and OFT and work for a combined industry solution to the issues the regulator raised last year.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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