On 9 March 2010, the Financial Services Authority (FSA) published feedback on its consultation assessing the Payment Protection Insurance (PPI) market (the First PPI Consultation).
The First PPI Consultation was published in September 2009 (see our blog here) and set out proposals to protect consumers in the PPI market to ensure that they are better treated when buying PPI or complaining about it. Among the proposals was guidance setting out standards of redress where a complaint relating to the sale of PPI is upheld. Particular detail was provided on the redress of complaints relating to the sale of single premium policies, where, for appropriate cases, the FSA proposed that comparison is made to an alternative regular premium policy that the consumer would have needed, wanted and been prepared to buy at the time (known as the "comparative approach" to redress).
Following responses received from stakeholders on the First PPI Consultation, the FSA issued a new consultation on 9 March 2010 with the feedback received on the First PPI Consultation and set out revised proposals (Second PPI Consultation). Among the changes to the original proposals, the FSA has:
- increased the proposed referent regular premium price for all firms to use when assessing redress under the comparative approach;
- set out a menu of different ways in which firms can implement the comparative approach; and
- given the industry more time to implement the measures.