30 March 2007
The Financial Services Authority has announced that more substantial refunds will be made available for consumers who cancel their single-premium Payment Protection Insurance (PPI) policies.
Previously, customers who have decided to cancel policies outside the statutory cancellation periods have found that insurers will give a limited, or in some cases no, refund.
Nick Starling, the Association of British Insurers' Director of General Insurance, said: "Last year, insurers agreed to make an appropriate refund on single premium payment protection insurance whenever customers cancel their policy and have not made a claim, whatever their reason.
"Customers can check with the company that they bought their PPI through, or direct with their insurer, how much they would get back if they cancel the policy or repay the loan early.
"We are working on additional initiatives to further improve consumer understanding of this product to help everyone get best value for money," he concluded.
Other initiatives to be implemented to increase transparency within the market included the requirement of insurers to contact existing customers if their contracts contain nil-refund terms to inform them of how refunds will be dealt with in practice.
In addition, participating insurers are to be trusted with the task of making sure that the refunds were calculated fairly and to include a table or illustration to show consumers how their refunds are being worked out.
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