The Consumer Panel whilst generally supportive of the FSA’s new insurance rules published today, disagrees with the way Private Medical Insurance (PMI) will be treated under the new regime and believes consumers will be put at risk.

Under the FSA’s new Insurance Conduct of Business Sourcebook , Private Medical Insurance will be in the same category as car and household insurance which are normally straightforward and easy for customers to understand. The Panel has advised the FSA that in its view, private medical insurance can be much more complex, containing unfamiliar medical terms and concepts. In addition the Panel’s own informal survey of PMI providers showed it is not always as easy to switch products as it is with other annually renewable policies. Consumers may, for example, face barriers to switching where a medical condition has arisen during the period of cover. The Panel has told the FSA that PMI products should be subject to the more detailed requirements, which other more complex insurance products such as PPI will still require, about product disclosure and suitability, to give consumers a greater degree of protection.

John Howard, Chairman of the Financial Services Consumer Panel said:

"The FSA has said that, in the move to more principles based regulation, it will maintain similar levels of consumer protection and keep rules where necessary. We believe this is an area of potential consumer detriment and the FSA has agreed to look in particular at PMI in its post implementation review to see whether this is the case. "

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MEDIA ENQUIRIES