Bulletin 26, 2006
Round up
1 - the number of life insurance rate changes since the last bulletin, this time from Norwich Union, who also launched their new 'simplified life cover' life insurance product this week.
7 - the number of new product initiatives we hear are currently in various life insurance and protection pipelines. Is the protection world's development paralysis waning?
25% - the number of consumers who believe price and convenience were more important than suitability and product features when they bought critical illness cover.
15,000 - the number of Income Protection policies sold by HSBC in 2005
Comment of the week
'We believe that Income Protection is vital for anybody earning a salary, and the advice we give ensures that our customers appreciate the importance of protecting their everyday finances.'
Robert Lang,
CEO, HSBC Life & Pensions (UK)
'The Carphone Warehouse failed it's telephone sales consumers by not giving them all the information necessary for them properly to understand the insurance product they had bought. Customers were therefore exposed to the risk of being left with an insurance policy which was unnecessary or provided incomplete cover leading to rejected claims. In either case they could suffer some degree of financial loss.'
Sarah Wilson
Director of Retail Firms, FSA
Villains of the week
Carphone Warehouse and Regency Mortgage Corporation
The FSA has fined The Carphone Warehouse £245,000 for not treating customers fairly in sale of insurance products. The FSA says an investigation found the company had failed to send 118,000 customers who bought insurance through its telesales channel a Statement of Demands and Needs in written form. The regulator says it subsequently discovered that 56,000 of these customers also did not receive a policy summary setting out the main features. The FSA says this was a ‘serious failing’ as both documents contain important information to help customers understand the policy they are buying and breached TCF rules.
The Regency Mortgage Corporation has also been fined £56,000 by the FSA in the first action the regulator has taken against a firm for sales of PPI since general insurance regulation (ICOB) was introduced. The firm was fined for breaching treating customers fairly principles and poor compliance procedures.
Heroes of the week
The Protection Sky Dive Charity Jump Team
The group, aka Kate Hughes (Financial Adviser), Peter Chadborn and CBK, Mike Warr (from life insurance company Royal Liver) and Monica Woodley (Money Management), will be jumping 14,000ft on September 23rd to raise money for various charities including The Rotary Club, NSPCC, RNLI and the Stroke Association.
Kate says 'The RNLI have always been close to my heart as my family have always been lifeboatmen and women. Currently two cousins and an uncle are crew members. The volunteers go out any time of the day or night - in conditions that would make me want to hide in a cupboard - without a scrap of funding from the government and risk their lives everyday as volunteers trying to help people out, and then go back to their day jobs. Absolute legends the lot of them. My target is £2k and I'm up to around £1,200.'
HSBC
We have praised HSBC before when it comes to life cover and other types of protection and do so again this week. In 2005, the bank sold more than 15,000 Income Protection policies, which is more than 10% of the UK Income Protection market.
If others on the high street followed their lead, instead of focussing solely on PPI, the £170bn Income Protection gap that exists in the UK would be a whole lot smaller.
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