The Financial Services Authority has said that they are determined to improve standards in the mortgage market. They are to conduct a review of the effectiveness of its general insurance regulatory regime and publish examples of good and bad practice in November next year.
The review, which will begin in April 2006, will look at payment protection insurance selling practices in companies ranging from high street banks to motor dealers and small mortgage intermediaries. The Financial Services Authority believe that regular premium payment protection insurance sold with prime mortgages seems to be compliant with their rules, but selling practices in other sectors of the general insurance market are very poor.
Our view
Difficult line to tread. People with financial problems want loans and the lender wants the security that their loan will be safe in the event of a problem by having insurance.