You are here: Home - Insurance - News -

FSA to tighten rules on packaged accounts

Written by:
The Financial Services Authority (FSA) has proposed out new rules which would require banks and building societies to check customers’ eligibility to claim on insurance cover provided in packaged accounts.

The rules would affect current accounts bundled up with a range of insurance policies, such as travel insurance, and other features such as overdraft facilities, music downloads and VIP lounge access.

According to the FSA, there is a risk that consumers may think they are covered by each policy, but later find they are ineligible to claim or that the policy is unsuitable in some other way.

Now being consulted on, the rules, which only affect non-insurance policies, will require banks and building societies to:

  • Check whether the customer is eligible to claim under each policy and share that information with them
  • Establish whether each recommended policy is suitable for the customer and alert them if some are not
  • Provide customers with an annual eligibility statement setting out the requirements to claim each of the benefits under each insurance policy in the package which should prompt customers to check whether their circumstances have changed and whether the policies continue to meet their needs.


The FSA estimated one in five people now have these packaged accounts and the rules, if finalised, would come into effect from 31 March 2013.

Sheila Nicoll, FSA director of policy, said: “These products are often referred to as upgraded accounts but if you end up paying for an element you can’t claim on, it’s money down the drain.

“We are closely monitoring the promotion of packaged bank accounts and the new rules will make sure customers know what they’re buying and that they can rely on the product or have the limitations explained before buying.”

The FSA will also monitor the promotion of packaged accounts where monthly costs are advertised alongside yearly benefits.


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
King: policymakers not ‘bad’ bankers caused crisis

Governor of the Bank of England, Sir Mervyn King, has admitted major mistakes were made by economic policymakers during the...