Ban of single premium good for PPI Industry

The Competition Commission's decision to ban the sale of single premium policies will ultimately be better for the PPI industry as whole, says Defaqto's Head of Insight, Brian Brown.

He said: "The ban on the sale of single premium PPI policies has long been overdue and provides the opportunity for lenders to make a fresh start. In the long-run customers will benefit from PPI policies which have more transparent pricing, and better early cancellation terms."

In its annual report into PPI market Defaqto has reported for the past 3 years that the sale of some single premium policies was damaging consumer confidence in the whole industry.

In the run-up to the publication of the Competition Commission final findings, many loan providers already stopped selling their single premium PPI policies, but are yet to replace them with new policies. Defaqto expects that in coming months we will see new ranges of policies emerging, long before the CC deadline of October 2010.

Brown added: "Given the current economic climate the need, and demand, for PPI has probably never been so great. Now is the time for providers to launch PPI policies which are affordable, and which will protect their customers in difficult times."

He said: "Other changes from the CC will be less welcome, including the 7 day ban on selling at PPI at the point of sale of the credit. However, the issues presented will not be insurmountable, and providers have more than 18 months before they need to bring in the changes, so there will be plenty of time to decide on their new sales process."