Emma RadmoreThe FCA is concerned that competition is not working well in the pure protection sector and is to start a market study into how pure protection products are sold. These products are mainly sold through intermediaries.
The FCA has a number of concerns, including:
- that the design of commission arrangements may not allow firms to deliver good outcomes to policyholders; and
- the some products may be providing poor value.
It wants to understand how consumers engage with and understand the products as well as how insurers and intermediaries work together, the possible conflicts that arise in commission arrangements and competition issues.
The FCA has published its proposed terms of reference for the study, which will cover term assurance, critical illness cover, income protection insurance and whole of life insurance.
It asks for views on the proposed terms by 11 October and will launch the study later this financial year.