Press Release

FLA RESPONDS TO OFT PPI REFERRAL

7 February 2007

The Finance & Leasing Association (FLA) has today responded to the referral to the Competition Commission by the Office of Fair Trading (OFT) of the payment protection insurance (PPI) market.

We are disappointed that the OFT has made little effort to fully engage either with the PPI supply chain or with trade associations. In the light of the changes already made in the PPI market, and the changes anticipated by the FSA’s thematic reviews and review of its rule book (the Insurance Conduct of Business Rules (ICOB)), for the OFT not to acknowledge the changes underway and in the pipeline, weakens its conclusions.

FLA Director General, Martin Hall said:

“We are disappointed that the referral was taken after hasty research without full and detailed consultation with the industry about possible remedial steps, and even without any recommendations to the Commission about what steps or changes may be needed to solve the problems identified by the OFT.

“The Competition Commission will need to work closely with the FSA, the regulatory body for insurance, to make sure that by the time it closes its investigation and makes its judgement, the necessary changes haven’t already been made.”

FLA and its members will work constructively with the Competition Commission during its Inquiry.