The ABI is setting up its own kitemarking system for the protection, pensions and investments industry to encourage the development of cheaper and more transparent products and to provide consumers with a fairer deal.
Based on data gathered through the initiative on Savings And Long Term Risk, known as Project SALTR, the marks will be based on three key areas – clarity of information, appropriateness of the product purchased and the quality of the service provided.
An independent accreditation body, the Pensions, Protection and Investments Accreditation Board (PPIAB), will police the new regime.
Standards will be set by the industry in consultation with consumers, consumer groups, the regulator, Government and the industry. Each will be backed by a series of specific measures that will have to be met before a company can become accredited and use the quality mark awarded by the PPIAB.
It is expected that the standards will be published formally in the first half of 2000.
The PPIAB will have nine board members, none of whom will work in the industry. Once operational, it will become self-funding through revenues generated by the accreditation process.
The initiative on Savings And Long Term Risk was set up more than a year ago by a group of 10 of the largest life offices in the UK, under the guidance of the ABI.
It has a number of different work streams but its underlying goal is to improve the industry’s reputation by encouraging transparency in product development, something the Government and regulators have been pressing for in light of the pension mis-selling scandal.
Sandy Leitch, chairman of the ABI and who led the initiative, said he had been working closely alongside IFAs to ensure that the new arrangements would be effective in driving up standards.
He said: “The UK’s protection, pensions and investments industry is the largest in Europe and is today a world leader. At the same time, consumers are still under-insured and under-pensioned.
“While industry standards have improved in recent years, we now want to stretch our performance further.
“Our aim is to benefit the consumer by developing clearer, more comparable information and assure that they receive a high standard of after sales service. In this way the initiative will complement existing advice mechanisms.”
Howard Davies, chairman of the Financial Services Authority, added: “Any industry initiative that helps to raise standards in the interests of consumers is to be welcomed. We await further details with interest.”