The Financial Services Authority (FSA) has published new rules requiring banks and building societies to check whether customers are eligible to claim on insurance cover before selling them a packaged bank account.
Packaged accounts are current accounts bundled up with a range of insurance policies and other features such as overdraft facilities or music downloads. In a market where one in five people now have these products, the FSA wants to increase the level of consumer protection.
From 31 March 2013, banks and building societies must:
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Check whether the customer is eligible to claim under each policy and share that information with them;
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If the sales adviser is recommending policies in the package they must establish whether each policy is suitable for the customer and alert them if some are not, and;
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Provide customers with an annual eligibility statement setting out the requirements to claim each of the benefits under each insurance policy in the package which should prompt customers to check whether their circumstances have changed and whether the policies continue to meet their needs.
The FSA is also consulting on further issues including a proposal that annual eligibility statements should be sent to customers as a separate mailing to give them added prominence, and that banks and building societies should proactively tell customers who have triggered the age limit for claiming on the travel insurance element, or warn them if they will do so before the next statement is due. Comments on the Consultation Paper are invited by 29 October, 2012.
Full information
Consultation Paper
© FSA - Financial Services Authority
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