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Insurance Policies

Volume 447: debated on Tuesday 13 June 2006

To ask the Chancellor of the Exchequer (1) what representations he has received regarding cashback claims from insurance policies operated by a company called PowerPlan; (76524)

(2) what steps he is taking to ensure that consumers applying for cashback from insurance policies are made aware of the laid down conditions included in the small print.

The Government have received representations regarding the issue of cashback claims from insurance policies operated by Powerplan.

The Financial Services Authority (FSA) is responsible for regulating the sale of general insurance policies. The FSA requires all disclosure to be clear, fair and not misleading, and for retail customers to be given a policy summary which sets out key aspects of a policy before the sale is concluded. The FSA does not regulate travel insurance sold as part of a package. Nor does it regulate sales of non-motor extended warranties under €500.

Extended warranties can be service agreements or insurance backed contracts. The sale of extended warranties on domestic electrical goods are regulated through The Supply of Extended Warranties on Domestic Electrical Goods Order 2005, which includes specifying information that should accompany the sale of the product.

For insurance-backed products, consumers will have a right of recourse to the Financial Ombudsman Service in respect of the insurance contract.