Norwich Union is fully supportive of any proposals that help to enable consumers to understand the products they are buying. This has been clearly demonstrated through the leadership approach we have taken through the Raising Standards scheme.
Norwich Union is fully supportive of any proposals that help to enable consumers to understand the products they are buying. This has been clearly demonstrated through the leadership approach we have taken through the Raising Standards scheme.
However, there are four key issues where we have serious concerns about whether the objectives of CP170 will be realised.
1. Costs of implementation – We believe that the estimated costs in the consultation paper have been significantly understated. We estimate that to implement the proposals Norwich Union would need to incur multi-million pound costs. We therefore expect the total cost to the industry could be well in excess of Ł200 million, more than double the cost suggested.
2. Benefits – We do not believe that the marginal benefits will justify the massive cost of implementing these proposals. Huge steps have already been taken through Raising Standards and the proposals could be achieved through incremental improvements to the current regime rather than wholesale change at disproportionate costs.
3. Raising Standards – As a Raising Standards accredited provider, Norwich Union has been in the forefront of improving product disclosure information in both key features documents and illustrations to benefit consumers. The FSA’s own research for CP170, detailed in the consultation paper, states that the "completely remodelled version...was not significantly better understood than the Raising Standards version". Again this would suggest that for accredited brands the benefit of adopting these proposals would only be marginal, at huge extra cost.
4. Sandler review – We are currently in the middle of the consultation process on new simplified products, which by their very nature will demand new, clear pre and point of sale material under Norwich Union’s proposed regime for the regulation of advice for these products. It would seem sensible to wait until this consultation process is completed and understood.
Sally Shire, director of marketing strategy and communications at Norwich Union, said: "A vast amount of work has already been done to lay strong foundations in terms of disclosure to consumers, in the form of Raising Standards. More discussion is needed to determine the most beneficial route to build upon this rather than re-inventing the wheel and incurring considerable costs in return for only marginal benefits for the consumer.
"We look forward to working with the FSA and the Raising Standards Industry Standards Group to deliver an effective and affordable regulatory regime, which meets our shared objectives."
-ends-
Press office contacts:
James Evans - 08703 66 68 78 / 07790 487105
Ian Beggs - 08703 66 68 71 / 07790 487 533
Louise Goffee - 08703 66 68 70 / 07810 057362
Notes to editors
- Norwich Union is the UK’s largest insurer. It is a leading provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% of the company’s long- term savings business.
- Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group.
- Norwich Union’s news releases are available on the Aviva plc website at www.aviva.com.
- A selection of images are available from the Norwich Union Newscast site at www.newscast.co.uk.