FSA will investigate insurance price comparison websites

The financial services authority is to look into claims that insurance related price comparison websites mislead their users into buying the wrong insurance policies for their needs. The British Insurance Brokers Association (Biba) has contacted the regulator and made calls for the regulations regarding price comparison sites to be overhauled.

Biba's argument centres on the claim that insurance price comparison sites give financial advice when they promote to their customers the cheapest insurance. They believe that there is too much emphasis on price and not enough on the insurance policy's features. As a result the customer might end-up buying the wrong insurance policy for their needs. Biba have further concerns that the comparison sites use certain tools that make assumptions about users and this can lead to customers being provided with quotations for insurance which ultimately they don't end up paying because the assumptions were incorrect.

Biba's arguments also centre on the fact that the current regulatory requirements were drafted before the explosion in popularity of the aggregator or price comparison sites and the rules need to be looked at again in light of the growth of the sector in order to check on the appropriateness of the current rules in order to ensure that consumers are afforded adequate protection.

The rules were last looked at as recently as 2005 when it was determined that the no rule changes were necessary. However it has been reported that the FSA will reassess the current arguments in light of the current calls for change.

Meanwhile the growing popularity of price comparison sites amongst those looking for cheaper insurance quotes will no doubt continue to stir debate within the insurance industry.

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