FSA and OFT must provide regulatory certainty for PPI

Specialist Lloyd’s insurer, Jubilee, is calling on the Financial Services Authority and the Office of Fair Trading to provide regulatory certainty if there is to be any growth in the payment protection insurance market.

In its response to the recent joint FSA and OFT consultation on the new breed of payment protection insurance products in the market, Jubilee highlighted the significant change to PPI products now being made available to consumers to protect their financial commitments.

However, like other insurers, Jubilee has refrained from involvement in some product opportunities because of a lack of clear guidance in this area.

Chris Biles, active underwriter and head of personal lines for Jubilee Syndicate 5820, said: “The market fragmented in the wake of the earlier Competition Commission PPI market investigation, existing FSA requirements and the explosion of PPI mis-selling complaints. As a result, we have seen lenders and other distributors look to different product options to help consumers.

“Anything which helps to clarify the responsibilities of both distributor and insurer has to be welcomed. But the FSA and OFT must recognise that there is a clear role for both lenders and insurers in helping to ensure that borrowers have access to appropriate ways of reducing the risk of being unable to maintain financial commitments.

“The key will be that any solution is designed to be easily understood and matched to the specific needs of the customer.”