In the first of his exclusive new series, Kevin Carr looks at the ups and the downs this month in the protection industry.
5). PPI CLAIM FIRMS
Payment Protection Insurance (PPI) wasn't always a great product to say the least. Some people were mis-sold policies that often had very little chance of being claimed upon successfully. They should get their money back accordingly.
However, having looked at various PPI claims sites, I'm yet to find one that mentions proper Income Protection (IP), let alone one that attempts to explain the differences between IP and PPI.
I wondered if the claims people on the phone knew... so I called a few. I found they didn't really have a clue. There is a script to follow and follow it they do. Some said we only deal with ‘single premium PPI' policies, which thankfully rules out IP, but most just said give us your details and we'll send you a claim form.
I wonder how many IP policies end up at their door?
VERDICT:DOWN
4). PAID CLAIM STATS
An obvious winner with Protection Watch (PW) this one. Publishing claims statistics - once there is enough detail to make it meaningful - is the fair, right and transparent thing for our industry to do.
Those who are publishing their stats are in excess of 90% for both critical illness (CI) and IP, and rising, which is great, although there are still some well-established companies yet to publish them. What's keeping them?
VERDICT:UP
3). FSA CP 09/31
The saviour of the protection industry or, as one leading commentator recently put it, "A sting in the tail from the industry's favourite whipping boy"?
This is, of course, the December 2009 Delivering the RDR paper that wisely, and thankfully, allowed commission to continue in the ICOBS-regulated protection industry.
So what's the problem? Good question that. Some feel the devil in the detail spells a potential minefield for IFAs who wish to sell across both COBS and ICOBS regimes.
FSA seems to be suggesting that, if an adviser wants to receive commission on protection business, he or she must transact this business only under ICOBS, while any other recommendations, such as investments or pensions, fall under COBS.
Is this a potential administrative nightmare, that could lead to confused customers not taking the advice they would otherwise have done? Or is it nothing much to worry about? After all, two regimes already exist in tandem, such as in the mortgage market.
Or maybe, just maybe, could FSA be trying to make it harder for COB advisers to migrate into ICOB protection sales just for the commission? I hope not, because, as is so often the case with regulation, the unintended consequence could cause far greater damage.
VERDICT: DOWN
2). SOAP STORYLINES
My protection chums and I have noticed several protection-related storylines in the soaps recently.
While the detail isn't always accurate, scriptwriters don't tend to include things that won't attract the audience's attention, which means protection - be it redundancy, illness or death - must be higher on the consumer's agenda now than it was before.
VERDICT:UP
1). NEW THINGS!
New things are always likely to be a good thing, because PW likes innovation. January saw a new IP product from Legal & General and a very interesting new website from Exeter Friendly where you can ‘Get Bob dancing!'
VERDICT:UP
Kevin Carr is chief cxecutive of the Protection Review and managing director of Kevin Carr Consulting
