New Financial Services Authority guidelines have set out the standards expected from finance companies when drawing up contracts for products that allow them to vary charges through small print clauses. Savings, deposit accounts and mortgages will be most affected, where providers can alter interest rates, and long-term health insurance contracts, where premiums can be reviewed.
The new guidelines mean that companies will have to set out when and why they will make their premium or interest rate reviews. They will only be able to review premiums because of valid reasons or events that happen outside the control of the insurers that might cause future claims to be changed.
Our view
Anything that reduces small print is a good thing, although the FSA no doubt realise that providers do have to cover their costs.