The Competition Commission (CC) has published the final report of its market investigation into the supply of payment protection insurance (PPI). In the report the CC concluded that it should impose:

  • A prohibition on distributors and intermediaries from selling PPI to their credit customers within seven days of a credit sale, unless the customer has proactively returned to the seller at least 24 hours after the credit sale.
  • A prohibition on selling single-premium PPI policies (where the premium is paid in one upfront payment, generally by adding the premium to the credit borrowed).
  • A requirement on retail PPI distributors to offer retail PPI separately when they also offer retail PPI bundled with merchandise cover.
  • Several requirements to provide specified information in marketing materials, at the points of sale of credit and PPI, and each year after the PPI policy has entered into force.

The FSA has considered the remedies package set out in the report and welcomes this intervention to enhance competition in PPI markets as complementary to its work to improve sales standards. The FSA has also clarified conduct of business requirements for firms selling PPI, which are set out in the Insurance Conduct of Business sourcebook, to ensure that firms are clear that these standards and requirements remain in place.  

View Clarification of ICOBS requirements following publication of the final report of the Competition Commission's market investigation into the supply of PPI, 29 January 2009