Despite its reputation and inertia from lenders, Simon has for years lobbied that PPI when properly sold provides an invaluable financial safety net. However he says that any future come-back was thwarted when the FCA recently announced it would consult on commission bias following the Plevin v Paragon Personal Finance Supreme Court ruling earlier this year, potentially opening the floodgates for more claims.
In January 2014, British Money launched a Defaqto five-star rated product that transferred the regulatory, financial and reputational risk from lender to insurer. However banks and building societies said that the cover was too risky to sell, adding that 'no one wants to be in the firing line’.
As a result, British Money is moving into the car insurance market, specialising in telematics and cover for under 25s.
Simon Burgess said:
“If the FCA wants to open a ‘can of worms’ about extortionate commission payouts it would be fairer to look at all policies, rather than just one. The 51% PPI commission referred to in the Plevin case is far exceeded by other policies, such as extended warranties and I know of one ‘ethical’ mutual raking in 400% commission on its sale of over 50s life cover. The FCA is aware of these activities, yet happy to ignore them. Such discrimination is totally unacceptable.”
Simon helped to develop Payment Protection Insurance when he was a Lloyd’s underwriter in the 1990s, and predicted a mis-selling scandal in the years after the Millennium.
