The PPI policies, which were sold direct through branches, have begun to be withdrawn on a phased basis across all channels and will no longer be sold to new customers alongside Lloyds TSB, Halifax, Bank of Scotland, C&G and Black Horse personal loans, credit cards and mortgages.
In a statement, LBG said the product withdrawal would not affect customers with existing PPI policies.
It added that all existing applications will be honoured by the group up to 31 July 2010 for personal loans and credit cards, and until 20 November 2010 for mortgages.
LBG brands will continue to offer a range of income protection, critical illness and life assurance products.
Peter Vicary-Smith, chief executive of Which?, comments: “Lloyds decision to stop selling PPI is a huge victory for consumers. Hopefully, other banks will follow suit and we’ll finally see the back of this poor protection product.
“Now is the beginning of the end for PPI, banks need to get back to the drawing board and offer their customers insurance products that actually protect them when they need it.”
