The Financial Services Authority (FSA) has announced it will inspect general insurance add-ons for cars as part of its research into product performance and market conduct, starting in 2013.
Previous expectations the FSA would inspect insurance products, now ossified by the news that add-ons would be inspected, has led compliancy advisors such as Karen Wagstaffe, training and compliance director at Finance Cover & Training, to warn companies to ensure their audit trails, particularly their Statement of Demands and Needs (SoDaN), are "robust enough to deal with any queries or mis-selling allegations".
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Wagstaffe said the FSA is yet to clarify what add-on products will be looked at but said she expected GAP insurance and key, tyre and alloy insurance to form part of the research.
The FSA will most likely hand over the research to the Financial Conduct Authority (FCA), its replacement body, in the third quarter of 2013, when the FCA begins its consultation period.
Wagstaffe advised clients to review their SoDaN, as well as determining profit from add-ons, the potential harm to customers, the state of market competition, and customer and retail behaviour in the purchase of add-ons.
richard.brown@timetric.com
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