FSA urged to review price comparison websites
The British Insurance Brokers’ Association (BIBA) has urged the Financial Services Authority (FSA) to review its Insurance Conduct of Business rules for electronic introductions from price comparison websites.
The announcement comes after independent research agency FWD conducted a review of price comparison websites. The research raised concerns regarding the suitability of current FSA rules, which were finalised and implemented prior to the development of such websites.
According to the research, 84% of insurance buyers said the details of insurance policies offered on price comparison websites could be confusing. A further 93% of consumers said they expected insurance comparison websites to be regulated in the same way as insurance intermediaries.
Eric Galbraith, chief executive of BIBA, said: “The current FSA rules were written prior to the growth in these sites. I believe the regulator should now look again at developing more appropriate regulations, to ensure that consumers are being afforded suitable protections. There are still too many people logging on and making a decision solely based on the price of a policy, rather than the protections it offers them.”
However, Hayley Parsons, managing director of price comparison website Gocompare.com, disagreed. She said: “All the major insurance comparison sites are already authorised and regulated by the FSA, as are the insurance companies and the brokers who appear on them.
“Had BIBA’s comments come two years ago I might have agreed with them, however the new players in the comparison market have led the way in terms of providing far more product information to help consumers make the most informed choice and find the best product for them. BIBA’s research isn’t telling us anything new – people find insurance confusing whichever way they buy it.”