Association of British Insurers Faults Competition Commission on PPI

Nick Starling, the Director of General Insurance and Health of the Association of British Insurers (ABI), issued the following comment on the publication of the Competition Commission’s final remedies on Payment Protection Insurance (PPI).

“The ABI supports any measures that help people make an informed choice – for example, the remedies for clearer, more timely information about the cost of PPI and the product features,” he began.

“However, the ABI believes that the point of sale ban carries significant risks for borrowers, mainly by leaving them unprotected at a time when unemployment cover has never been needed more.

“Figures released only yesterday by the ABI show that in November 2008 there were 19,105 new unemployment claims on PPI policies. That is an increase of 118 percent from 8,772 in November the previous year. This massive leap in claims shows that PPI is helping many people through a difficult financial period.

“We welcome the reduction from 14 to 7 days for the point of sale ban which shows that the Competition Commission has acknowledged our fears about the risks to borrowers. However, we remain extremely concerned that the fundamental risks to borrowers have not been addressed. Our job now is work with our members and the regulators to minimize these risks and make it work. The devil will be in the detail.”

Source: Association of British Insurers – www.abi.org.uk