Insurance products for UK residents

Price Comparison Websites Under Scrutiny

The Financial Services Authority (FSA) has today written to the CEOs of several Price Comparison Websites highlighting their concerns about the mis-selling of general insurance (car, house, travel) etc.

They have highlighted possible breaches of the rules and regulations about the selling of insurance, which are found in the FSA handbook. In particular possible breaches of:-

  • SYSC 6.1.1R

  • ICOBS 4.1.2R

  • ICOBS 4.1.6R

  • ICOBS 4.1.7R

  • ICOBS 5.2.1R

  • ICOBS 5.2.2R and

  • ICOBS 5.2.4R.

The full letter can be found here.

A leading expert on insurance compliance has already voiced an opinion as to the impact of this review.

Our Opinion

Over the years B Portwood & Co Ltd have witnessed the development of price comparison websites, continually noting how the products offered have provided ever worse cover, lower policy limits and higher excesses than products sold through General Insurance Brokers.

The FCA do not mind what cover is offered to customers providing that a full disclosure of information about the cover is made before the product is purchased. This means that if someone buys a policy online and full information is provided then they only have themselves to blame if the policy does not pay out for claims that would have been covered under traditional policies.

As a broker we have always maintained the the benefit of an insurance policy is NOT the price you pay for it, it is how the policy pays out in the event of a claim, and the service a customer receives during the course of the policy and when a claim is made.

Regrettably too many people find out the mistake in buying an online policy too late.

If this review results in more information being provided to the customer about the cover of policies, whether advice is being given, and who to turn to if a complaint is being made then this is undoubtedly to the benefit of consumers.

However it is far easier to speak to, or call in to see an insurance broker and get proper advice - usually free!

For more information contact JB Portwood

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