In May of this year, the Financial Services Authority, which is in charge of regulating the industry, said that people who have life insurance in the UK and people who want to buy life insurance should be treated better. Some advisers who sell life insurance policies seem to give customers very bad advice about the product, both before and after the sale.
In a briefing on the insurance industry that the FSA put out, it was said that after-sales care for life insurance was seen as being very bad and that some customers may not have been treated fairly. Some people are also worried about the quality of the product they are getting. Sarah Wilson, who is the director and sector leader of the Financial Services Authority, says that the findings are important and that consumers should be able to make the right choices when it comes to buying the product.
The report said that consumers can't make the right choice for themselves when it comes to their profits policy because they don't have the right information. Consumers can be given very poor information before and after they have been sold a policy, which then leaves them unsure about what they have paid for and have actually bought.
In response to this and to try to fix the problem, the Financial Services Authority is asking those who sell insurance to spend more time with customers to make sure they know more about the product they are buying. If the product isn't clear, it needs to be explained in language that the customer can understand.
Sales of the product need to be evaluated, and the staff needs to make sure that the customer understands how the policy works and what the product can do.
The Financial Services Authority says they will start fining advisors and companies who don't put the customer's best interests first if sales techniques and advice about the product don't change to make sure the customer understands it.
The Independent newspaper said that the Association of British Insurers greeted this news with open arms and agreed with the Financial Services Authority's advice on how to make customers happier with their life insurance policies.
