The FSA has been criticised for coupling short-term income protection (IP) with payment protection insurance (PPI) in a letter warning providers about contract terms.
The FSA has written to providers suggesting some PPI and short-term IP contracts may be deemed unfair under the Unfair Contract Terms legislation because they contain a provision allowing companies 20 days notice for revising the terms of the contract.
According to the Income Protection Task Force (IPTF), short-term IP does not merit being "tarred with the same brush" and should not be compared with products that require regular renewal, allowing terms and conditions to be changed, or have short notice periods.
A number of insurers have entered the short-term IP space in recent months including Pioneer, which launched Bills & Things, and Foresters Friendly Society, which unveiled its FFS Sickness Policy.
Peter Le Beau, IPTF co-chairman said the IPTF intends to press ahead with plans, first unveiled in its recent white paper, to issue a kite marking system for both long and short-term IP, ensuring the payment period is crystal clear and understood by buyers
