Abbey insurance praises new rules

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Abbey insurance praises new rules

Today sees the introduction of a new regulatory regime for insurance, with the changes generally trumpeted as good news for consumers.

From today responsibility for regulating the insurance industry will move from the General Insurance Standards Council to the Financial Services Authority.

This will mean every insurance broker and intermediary will need to meet industry standards of professionalism and competence, while consumers gain access to the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS).

As with the mortgage industry, which is now regulated by the FSA, insurers will have to provide a policy summary, or key facts illustration, on their documents - allowing consumers to more easily compare different policies.

Abbey has praised the decision.

Angus Porter, Abbey's customer director, said: "We think the new regulations will bring real benefits to consumers. They'll ensure that people receive details of exactly what is and isn't covered before they buy insurance and will provide more detailed information about insurance policies that will make buying decisions easier.

"Abbey will provide advice along with the new 'Key Facts' documents as we believe that there is no substitute for talking with people to fully understand their needs. Abbey staff have already been fully trained in the new regulations and we're confident that consumers can only benefit from what will be a much improved process."

However, there have been some concerns raised over the changes.

Observers have pointed out that the new regime could mean increased costs for the consumer.

On top of this some travel insurance and extended warrantees for electrical goods do not fall under FSA regulation - meaning consumers will miss out on the added protection and increased information on offer.

"Even though insurance regulation is obviously a good thing, and will help consumers in the long run, the increased cost of such regulation does mean that insurance providers and brokers will look for ways to pass on the cost instead of eroding the profits they make," said Nick White, of price comparison service uSwitch.com.

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