The FSA has announced plans to ease rules on simple insurance products such as household cover but tighten regulations on more complex plans for such products as loan payment protection cover.
The move comes in light of recent research which suggests that few consumers rely on disclosure documents, when purchasing simple insurance plans for car cover or home insurance.
However their have been marked failures by companies selling more complex schemes such as loan protection insurance for failure to make payment due to illness or loss of work. The FSA may introduce tougher guidelines to improve sales quality for these products, ensuring the consumer receives concise and correct information before agreeing to a plan.
The financial watchdog is expected to release new guidelines on the change in legislation, before the change in regulation due in December of this year.
