

Firms agree to improve online PPI
The UK finance industry has agreed to improve its sales of payment protection insurance (PPI) over the internet.
The Financial Services Authority (FSA) had raised concerns that when buying a loan or credit card online, a tick-box offering PPI was automatically ticked and that consumers had to actively choose to not have the insurance.
As such, the industry has now come together to change the way the insurance is sold so that consumers have to actively tick a box to buy the insurance and it is not set as a default when purchasing a loan.
Vernon Everitt, FSA of director retail themes, said: "We have made PPI a top priority and are pleased that firms have agreed to change the way they sell PPI over the internet.
"Naturally, many customers are focussed on getting the loan itself, but it is just as important that they also think about whether or not they want to protect their loan repayments by taking out PPI cover."
He added: "This change means that it will be up to the customer to actively choose to buy PPI rather than it being sold automatically."
Last month, the FSA launched a consultation paper into how it wishes the insurance industry to be regulated. The body is aiming to move towards a principle-based regulation, to replace what is often considered costly and complicated regulation.
For general insurance the move would see a set of high-level rules and principles, except where European directives demand detailed provisions or detailed rules provide the best way to protect consumers.
For PPI, critical illness cover, income protection and term assurance, the FSA intends top introduce a number of additional rules targeted to improve selling practices in areas where the authority feels consumers are currently losing out.
Dan Waters, FSA director of retail policy, said: "Following our recent radical overhaul of the investment conduct of business rules, today's announcement is another big step towards more principles-based regulation.
"All the evidence suggests that consumer detriment varies a lot according to the type of insurance product involved. And it is right we should now move to a differentiated and principles-based regime for general insurance where the focus is on outcomes for consumers rather than processes within firms."
Responding to the consultation into principle-based regulation, Nick Starling, director of general and health insurance at the Association of British Insurers, said: "The FSA has today taken a huge step forward towards genuinely principles-based regulation. It has heard our message that the current rules are over-complicated and costly.
"Overall, this package signals real progress for the industry and customers. It is a major advance on the original implementation of general insurance regulation in 2005."