FCA has published a thematic review into before the event selling of Motor Legal Expenses Insurance (MLEI). It noted that because MLEI is a complex product, it is often hard for consumers to understand, though often useful to certain consumers. It concluded firms should review their practices in three areas:
- the basis on which MLEI is provided;
- the quality of explanation of MLEI at all stages of the customer journey; and
- the extent of the cover.
The review found consumers are usually aware of MLEI but do not fully understand it. MLEI is often offered on an "opt out" basis and many consumers would be nervous about deselecting the option. Following discussions with a number of firms, FCA now wants all firms to consider how they offer, explain and sell MLEI. Specifically, it criticised firms who did not understand the nature of cover well enough to explain it properly to customers, and those that pre-selected the cover and offered confusingly bundled products, sometimes with misleading warnings for customers who tried to deselect the cover. FCA will revisit firms' behaviour in a year's time. (Source: FCA Publishes MLEI Thematic Review)