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FSA in the spotlight: New rules for selling PPIs

New general insurance rules include changes to the way PPI can be sold.

The final rules for the new Insurance Conduct of Business sourcebook (ICOBS) were published by the FSA just before Christmas. The new rules differentiate between protection products (term, critical illness, income protection and payment protection insurance (PPI)) and other products (all general insurance except PPI).

The new rules came into effect on January 6 and have a six-month transitional period. There is an exception: the FSA is allowing a 12-month transition period for changes in the initial status disclosure document so that you can plan your printing schedules in advance to minimise any wastage of pre-printed material.

For all products except PPI you can, in effect, choose to carry on as you are. For PPI there are new disclosure requirements and, hardly surprisingly, they reflect the FSA findings from their mystery shopping and inspection visits and concerns about the quality of PPI sales.

The FSA is trumpeting ICOBS as a significant stage in the emergence of principles-based regulation with the removal of many detailed rules and much greater reliance on the 11 principles of business and high level standards and, of course, continued focus on the requirement to fulfil the treating customer fairly (TCF) requirements.

Finally, the Competition Commission is currently considering PPI and, as a result, there could be further changes made to the new rules to reflect this.

For those firms not feeling confident about meeting the challenge of the new ICOBS requirements or the TCF deadlines or who have other problems with meeting FSA requirements and are still confused about them, please contact us on 0845 226 2970 or email enquiries@

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