March 14, 2014

So those busybody do-gooders at the Financial Conduct Authority want to “prevent consumers paying for poor-value insurance products that they may not need or use,” do they?

To naive ears, that might sound all very nice – but how exactly would insurance firms be supposed to make any money if they carried on like that?!

If you sell people insurance policies they do need, odds are they’re simply going to claim on them! And that’s money down the drain for the insurance industry and its shareholders. And if those policies were what the regulator euphemistically calls “good value” in the first place, that would only make the problem worse.

Whilst the idea that insurance firms use so-called strap-on insurance policies to sneak a little profit around the edges of their loss-leading “needed” policies is clearly nonsense, Al Barnes of law firm More Stephens is absolutely right to insist that if the regulator is going to get all silly about a few harmless extras, “the pricing of products may need to be to be re-visited” which will only “increase insurance costs for consumers.”

And, in any case, quite frankly, what is so wrong with selling people things they don’t need? Do people need the latest LP from Justin Beaver, Westzone or Wand Erection? Do they need Beyoncy’s In Heat Eau de Toilet, a chocolate-pumping archimedes’ screw, or some Jimmy Shoe chews? No they most probably do not! We buy such things for the simple pleasure of their ownership!

Who has time to tick every ‘yes please, I’d like one of those too’ box on every form they fill in? If we had to spend all our precious time on things like that, we’d never get anything done. Pre-ticked boxes are a convenience we would all miss sorely if those meddling bureaucrats took them away!

Most outrageous of all is the FCA’s absurd insistence that insurance buyers should be told what the claims ratios are on the policies they are offered. Have they really not thought this through?! That would be like online gambling sites and bookies publishing odds for all to see! It’s clearly a non-starter.

So kindly go away and have another little think, will you, Mr Regulator, before things get any further out of hand!

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