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Insurance Policies

Volume 453: debated on Monday 20 November 2006

To ask Mr Chancellor of the Exchequer (1) what measures are in place to ensure that insurance policies sold in a sealed pack off-the-shelf display terms, conditions and exclusions on the outside of the pack; (100727)

(2) whether he has received representations on the insurance policies provided in off-the-shelf packages on the high street.

The Financial Services Authority (FSA) is responsible for the regulation of the sales of insurance policies.

The FSA makes no distinction in its regulatory treatment of the sale of sealed pack, off-the-shelf, insurance policies and other forms of non-advised sales. Off-the-shelf insurance policies are typically bought in a high-street store, such as a supermarket, with the contract normally concluded by a subsequent telephone conversation or by completing an application form and returning it by post.

For all products that they regulate, the FSA applies the principle that firms should treat their customers fairly and provide them with clear information. Firms are required to take reasonable steps to ensure that customers do not buy policies under which they are ineligible to claim benefits.

Firms are also required to give customers a policy summary, in addition to the full policy information, to provide key information in a clear and easily digestible form. The summary must set out the significant features and benefits of the insurance and significant or unusual exclusions, so that customers can check that the insurance is appropriate for their needs.

FSA rules also require that for non-investment insurance contracts firms offer retail customers a minimum cancellation period of 14 days for general insurance contracts and 30 days for pure protection contracts.

HM Treasury and the FSA have received a small number of representations on the subject of non-advised insurance sales.