PPI - possible solution

[Mike Cranny]

No surprise there.

The ABI only look after their own and their members 's interest - not that of either brokers or the Public.

Can I suggest you ask them for comment on the FSA's paper on the joint responsibilities of distributors and providers.

Do they accept the FSA's position, or disagree with it?

[davidmd]

As far as the FSA are concerned Insurers DO have a responsibility throughout the distribution chain. Why else would Insurers issue Terms of Business Agreements setting out duties and responsibilities of agents and sub agents ?

[Mike Cranny]

The matter is dealt with in PERG 6.7 from memory.If you are offering for example a third party warranty on SKY products, you are possibly acting as an INSURER. If you are offering an insured products, you need broking permissions.

There are some exception where the work is carried out by your own employees - but most people want the benefit of an insurer product as there have been many failures in this market

[James Sharp]

Mike, I think you were answering the Appointed Representative thread... and put your answer in the wrong place!

[TimDawson]

Really good points made here. Going by those TCF guidance the insurers clearly have a duty to ensure their product is distributed an a way that is fair to consumers and in the case of banks this clearly wasn't the case. In this light the insurers should payout to the fund.

On a related issue, with a particular focus on:

(1) should decide whether this is a product where customers would be wise to seek advice

It is clear that clients need advice when buying PPI but it is being sold on a mass scale on a non-advised basis by comparison sites (mostly via brokers I admit). Surely recent history is enough cause for serious questions to be asked about this practice?

[davidmd]

As to practice Tim this is now starting to cease. Lloyds TSB have recently pulled out of the market and from my own personal financial dealings over the last 12 months Nationwide Building Society have pulled out of selling PPI as have the motor dealer and finance house I bought my car from a year ago tomorrow.

[Mike Cranny]

The very bad news, is one of the loan companies that sold this junk have put themselves into liquidation and started up again (allegedly) as a claims farmer advertising for PPI claims.

[Chrisyoung69]

The TCF guidance looks fairly clear-cut in terms of the insurers having partial blame for PPI mis-selling so they should definitely be made to make significant contributions. Let's hope the FSA take the same view.

[Mike Cranny]

I have received a response from the FSA.
Unfortunately they did not read my email properly and assumed I was just having a moan about the FSCS so they sent me a standard response explaining how the FSA and FSCS operate.

I have spoken to them today.
Unfortunately the people who work in the "correspondence department" don't take phone calls!

After explaining the matter again I got them finally to understand the question (simply put, does PS 07/11 apply and if so are they going to take action against insurers)

The Answer - can I write in again! I have done so!

On a gloomier note the FSCS levy arises (according to the email) from the failure of only 5 loan firms Picture Financial Services Limited, Aps Mortgages (UK) Limited, Loanmakers Limited, Twopart Limited and Dean House Financial Services Limited. It is possible therefore that there will be many many more.

[Martin Friel]

David Williams, Axa managing director of claims, has given a video interview to Insurance Age about insurer responsibility for the mis-selling of PPI.

He also talks of the support insurers could be giving to brokers as they fight the levy.

Watch it here.