British Money locked out of PPI sector
Its director Simon Burgess has maintained for years that payment protection insurance can provide an effective financial safety net when sold correctly, despite its toxic reputation.
But Burgess has now finally given up the ghost on selling the product after the Financial Conduct Authority announced that it would consult on commission bias following the Plevin v Paragon case. Burgess reckoned this will open the floodgates for yet more claims against PPI.
Burgess said: “If the FCA wants to open a ‘can of worms’ about extortionate commission payouts it would be fairer to look at all policies, rather than just one.
“The 51% PPI commission referred to in the Plevin case is far exceeded by other policies, such as extended warranties and I know of one ‘ethical’ mutual raking in 400% commission on its sale of over 50s life cover.
“The FCA is aware of these activities, yet happy to ignore them. Such discrimination is totally unacceptable.”
In January 2014 British Money launched a Defaqto five-star rated product that transferred the regulatory, financial and reputational risk from lender to insurer, but banks and building societies told the insurer that ‘the cover’s too risky to sell; no one wants to be in the firing line’.
Simon Burgess helped develop PPI cover as a Lloyds underwriter in the 1990s.
British Money is moving into the car insurance market, specialising in telematics and cover for under 25s.