BIBA supporting targeted regulation of insurance comparison sites

The broker trade body has submitted a formal response to the FSA proposed guidance: ‘Selling of general insurance policies through price comparison websites'.

BIBA noted that comparison sites are relatively new and avoided specifically targeted regulation because FSA rules were written before they gained wide market penetration.

Graeme Trudgill, BIBA's Head of Corporate Affairs, said comparison sites had primary involvement in the sale process and needed appropriate regulatory guidelines in place.

He added: "BIBA agrees in full with the draft FSA guidelines and is keen to co-operate with the regulator. We believe the cost benefit analysis demonstrates these important changes can be implemented for a relatively small sum."

The top issues BIBA highlighted are:
• The sites must be recognised as more than just introducers, they are arranging, sometimes advising and these activities bring more appropriate regulatory responsibility.
• Comparison sites must provide customers with relevant information including disclosure documents.
• They must ensure sales procedures are in accordance with the ICOBS rules.
• They must explain terms and conditions, ensure customer's eligibility, provide status disclosures around suitability of advice and provide a proper statement of demands and needs.
• The practice of ‘pre-population' of answers with defaults should end.

Steve White, BIBA's Head of Regulation and Training said: "The full detailed draft guidelines are an important step in consumer protection, they should lead to greater clarity giving customers a better understanding of the products they have purchased and less chance of them buying an unsuitable product.

"The guidelines should be fully implemented without delay."