PPI: a new beginning

Jubilee, underwriters of payment protection insurance, “passionately” believes in the value of these products and said it is committed to actively developing a range of customer-focussed offerings that meet the needs of consumers in the post-PPI mis-selling era.

David Swan, senior mortgage underwriter at Jubilee, said: “The past PPI mis-selling scandal has had a huge impact upon the public perception of the product and has led to many distributors withdrawing completely from offering any insurance protection on mortgages or other financial commitments.”

The FSA’s guidance, published last week, stressed that firms should ensure that product features reflect the needs of the consumers they are targeting while the OFT said that firms should be aware of the relevant statutory provisions and how these may apply in relation to credit agreements with debt freeze or waiver features.

It placed particular importance on the need for adequate transparency to consumers regarding the nature, price and implications of such products.

Swan said: “It is now time for providers to look forward with products and sales methods that will rebuild the confidence of consumers and regulators alike. This joint FSA and OFT guidance paper can only help distributors and insurers move forward with confidence.”

He added: “Firms need to recognise that this is not just a requirement at product design stage but needs to be measured and reviewed by the insurer and distributor throughout the product’s lifespan to ensure it is achieving the correct consumer outcomes.”

Jubilee has also welcomed the clarity provided on the use of debt waiver products as a replacement for PPI.

Swan said: “The fact that facilities including debt waiver or debt freeze provisions are unlikely to be classified as insurance, addresses the considerable doubt and argument there has been previously over this issue.

“It is now up to lenders and finance intermediaries to utilise such products in a responsible way and avoid any possibility of a repeat of the previous PPI abuses.”