The regulator explained some of these firms, along with other market players, now offer or plan to offer regular premium PPI instead of a single premium product.

The FSA said it remains concerned about the standard of sales of single premium PPI, and expects other firms still selling single premium PPI to take note of these developments.

Jon Pain, managing director of retail markets at the FSA, said: “We are pleased these firms have stopped selling single premium policies and would expect other firms to notice these developments and review their own positions. A PPI product can be helpful for customers wanting protection on a specific credit agreement, as long as the policy is sold appropriately.”