Fronting - played by the book & got $hafted!

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I agree .

dunstonh

As an IFA I’d have thought you would be fully aware that if an insurance company sells direct to consumers then they are responsible for using ‘best endeavours’ to ensure the policy was suitable.

That isnt the case with life and pensions and the general insurances we deal with. A product sold under Direct offer just has to make sure the information being shown is correct but its up to the consumer to decide if the product is right for them or not. The rules may be different to general insurance products like motor. I will let someone in that area clarify if that is the case or not.

It doesnt totally remove consumer protection (as AXA found out some years back when they were fined and had to pay redress when some data on their marketing was wrong). However, you cannot complain about the product being unsuitable if you did not seek advice about the suitability of the product. The seller on direct offer doesnt have to check suitability beyond the product requirements.

The whole point of being sold under advice is that you get greater consumer protection. Equally, the point of cutting out advisers/brokers is to buy the product cheaper but you also accept the lower consumer protection that goes with it.

vaio

pompeyrich wrote: »

Surely this wouldn't count as a cancellation in the "have you ever been refused insurance/had special terms applied or had a policy cancelled" type of way. Yes the policy has been cancelled but only because the driver no longer fits the required profile. I would like to think that having a policy cancelled because you passed a driving test would be viewed positively as opposed to someone who had a policy cancelled for failing to disclose a conviction/fronting etc. All young/inexperienced drivers have special terms applied in the way of higher excesses, so should they declare that at renewal or the fact that some companies refuse to quote them?
Maybe I'm niave but surely this won't lead to "a significant black mark"

I don’t know is the short answer, in the old days of brokers who you saw face to face and could explain the circumstances it probably wouldn’t be a problem. These days where all the best deals involve box ticking on the internet I’m not so sure, but the fact that it is a question asked on proposals is maybe a clue.

More important in my mind is the mis-selling/treat fairly aspect which has two facets, the first is that the policy T&C don’t require the passing of the test to be notified, the second is that any insurance company selling a policy to a learner must be aware that the learner is going to do their best not to be a learner and so should either continue cover or make it really clear that the policy will be cancelled if the test is passed.

BillTrac

jamesd wrote: »

nearlyrich, it's not money laundering, but it might have been described that way because of the Tesco money laundering identification checks, which might not accept a third party payer.

I know this has taken things a bit off-topic but I paid my daughters insurance through Tescos on my CC with no problem.

dunstonh

Money laundering guidelines are not rules. It is left to companies to interpret and decide their own ways of doing things. This is why there is often so much inconsistency. What then happens is the FSA will fine a company for doing something wrong (even though they probably werent aware they were doing anything wrong) and the other companies will react to that and make changes. So, you may have one company allow one thing and another company not.

realaledrinker

Thanks everyone for your helpful replies.

I fired off a complaint to the CEO of M&S. Usually more effective than writing to the complaints team IMO.

(M&S Spoke to the missus as she was a named driver, once passed security)

(Original policy cost was not the cheapest but the cheapest with a 'household name'. I had seen tales of Quinn insurance who quadrupled cover on passing the test (or at least they did before they went bust). M&S's quote was around the inflated numbers Quinn were quoted as demanding, so it seemed in the right ball park.)

(The policy clearly states son to be a provisional driver & also states "Call us if anything is incorrect as you may not be insured" and "If you fail to disclose a material fact your policy may be voided". Once he passed his test, the policy was incorrect, hence the call)

realaledrinker

Light blue touchpaper & retire...

Jackapoo

"On the fronting issue questions from your son stand firm and get him to have a look at some serious third party incidents e.g. the landrover derailing the train and explain to him the consequences of the insurers pursuing you as the fronter for their outlay!"

That is a very poor example of why not to front a policy!

I didn't read the Independent article as early on they got the definition of fronting wrong.

magpiecottage

I think that a complaint to FOS can be made on the basis of a breach of FSA Principle 7, which says:

A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.

It seems to me that a 17 year-old on a provisional licence is obviously intending to take a driving test and expects to pass it. Therefore, if the policy was going to be cancelled immediately they passed that was something M&S ought to have realised they would need to know in order to make an informed decision.

Furthermore ever since the ABI introduced its code of practice for the selling of business insurance - in the 1980s, I think - it has been generally accepted that any aspect of an insurance policy that is unusual should be specifically drawn to the attention of a purchaser.


I don't think that the M&S argument that it does not underwrite the policies will let it off as it is directly authorised by the FSA for insurance mediation (see here).