With effect from 1 April 2015 the selling of “opt-out” products alongside a standard insurance product is banned by the Financial Conduct Authority (FCA).
This change affects the way that certain providers can offer their products.
Prior to the ban there was a significant number of sales made on this basis where an optional additional product was included with a standard insurance policy, charged for and the customer had to actively remove the product.
The intention of the change is to help achieve the FCA’s objective in providers offering customers greater clarity as to the nature of the product they are purchasing.
Common areas where these “opt-out” products were included are on motor insurance, travel insurance, home insurance and on certain business insurance policies.
The effect of the regulation is not to ban the sale of these products but to ban their automatic inclusion in new business and renewal products. Legal expenses policies are a common example of an “opt-out” product but there are other types.
If a customer agrees to the purchase of an additional option product then the product may be included in subsequent transactions providing that the nature of the product is significantly the same.
How does the ban affect policyholders?
On new business and renewal policies the information provided to you must be clear so that you can understand exactly what the product is and then make a decision as to whether you wish to include the product.
How does this ban affect Blackfriars clients?
It doesn’t. None of our products include any “opt-in” products as standard and never have?