The FCA published the interim report from its Pure Protection Market Study last week giving the sector pretty much a clean bill of health.
Despite the 'interim' tag, it feels pretty much final. It’s good to see Cover giving it such thorough treatment, here.
The big headline, to the relief certainly for some areas of the market, is that there will be no interventionist remedies, again as Cover relates.
The regulator placed a great deal of emphasis on growing the protection market. In addition, restricted panels passed muster while in the associated area of enhanced commission and premiums, the FCA suggested the downsides were mostly being managed by advisers. That may prove controversial, among some commentators who had extensively critised the market.
The headline on Health and Protection cuts to the heart of the matter – ‘FCA resists banning loaded premiums despite being in quarter of sales’.
The regulator is seeking some change. Alongside possible changes to the sales process to make it more efficient and broaden the market, it wants to better understand income protection’s claims ratio, which is lower than other insurances.
Finally, it has worries about churning and is seeking more data, but didn’t see the issue as affecting a large part of the market.
Again, H&P cuts to the heart of the matter in its coverage.
It writes: “Insurers have written off at least £100m in clawback commission debt due to poor adviser behaviour with another £19m outstanding.
“Although these figures represent less than 1% of collected premiums between 2021 and 2024, the regulator added this highlighted a risk within certain parts of the distribution chain that required close monitoring in line with its handbook requirements.”
Does this story indicate some of the organisation’s recent lobbying successes? L&G rejoins the ABI, as Corporate Adviser reports.
Hargreaves Lansdown’s sweeping fee cuts mark a strategic reset as intensifying competition and its return to private ownership reshape the dynamics of the direct-to-consumer market, writes Money Marketing.
FTAdviser writes about how one accountant is using rap to educate people about tax.
Very timely.
