The Association of British Insurers has backed FSA plans to alter variation clauses as its own legal advice suggests the use of current contracts could be challenged by the Financial Ombudsman Service.
Special guidance issued today on the variation clauses – which allowed protection providers to alter the premiums paid on by consumers – indicates the range of information given to consumers on premium reviews might not be considered “core terms” and could therefore be challenged legally unless contracts are changed now.“Our legal advice confirmed that the concerns expressed by the FOS about the legality of some clauses - giving insurers a unilateral right to review a premium during the course of a contract - were well-founded and went on to identify the issues that insurers needed to addre...
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