FSA warns insurers on after-sales information

The Financial Services Authority (FSA) has charged that some insurers and financial advisers are not treating their customers fairly. The problem, as identified by the FSA, has to do with the service being provided to with-profit policyholders after they are sold a product. In particular, the Authority has found that much of the literature given to customers after a sale is filled with jargon and missing important information. This is especially a problem due to the fact that many policyholders do not have access to the advisor who sold them their policy and so have to rely on the literature provided to them by the company to answer any questions they have about their policy.

The FSA has warned the industry that they need to review their after-sales relationships with policyholders and improve the information they give to their customers after the sale is completed. They need to make sure that the literature customers are provided helps rather than hinders their ability to understand how their policy works and the features they have paid for. The changes asked for by the FSA will affect holders of the 32 million with-profits policies now in effect in the UK. Such investments invest in the stock market but equalize returns by holding back some of the money made in good years in order to make sure there are also returns in bad years.

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