The Financial Ombudsman S Decision Is Usually Binding On Both Parties

Category: Finance, Insurance.

There are no laws in the UK that require a person to have life insurance.

About 40% of the UK s working population are covered by life insurance either through their own policy or via an arrangement through their employer. It s an entirely voluntary insurance. So the simple things first. This is not a requirement laid down in UK law, but UK laws and tax arrangements make it impossible for a UK based insurance company to offer insurance to anyone other than a UK resident. You have to be a UK resident in order to buy a life insurance policy from a UK based insurance company. But be aware that if, having taken out life insurance, you later live abroad, your policy will be invalidated. All UK Insurance Companies are subject to UK Corporate Laws.

Naturally, invalidation does not apply if you are on holiday but if you have a short- term work assignment abroad you are well advised to inform your insurance company before you go. However, there are special regulations that only apply to insurance companies. These regulations are designed to ensure that your insurance company will be in a position to pay if you claim. These control the value of the risks the companies take on in relation to their financial reserves. The Data Protection Act 1998 is concerned with way all UK businesses store, safeguard and use the data they collect about people. One of the key provisions of the Data Protection Act says that if a business wishes to pass on your information for marketing purposes, the business collecting the data must tell you of its intention and give you the opportunity of refusing permission for your data be used in that way.

This is particularly important within the life insurance industry as the companies store significant amounts of very personal information about you- including your age, health record and life style. Incidentally, all reputable web sites selling life insurance will have a" Privacy Statement" which tells you how they handle your information and how it is used. The Act is highly complex but is primarily concerned with protecting you the customer. The Financial Services and Markets Act( 2000) is the most important piece of legislation affecting the promotion of financial services in the UK including life insurance. The implementations of the Act is overseen by the Financial Services Authority( FSA) . Their aim is to ensure you receive clear professional advice that reflects your personal circumstances. The FSA regulates all forms of the promotion of financial products and services including the activities of financial and mortgage advisors in the UK.

They also ensure you have a route to compensation should it be proved that you received inadequate or poor advice. The FSA seeks to ensure that all financial advisors are trustworthy and competent which includes being well supervised and well trained, and that any advice is given in your best interests. For the layman, the FSA s biggest impact is reflected in the advisors they talk to. The FSA also ensures that you are given full and accurate information about the products you are being advised to buy both before and after you have bought them. In fact everyone and every organisation giving financial advice in the UK must be authorised by the Financial Services Authority. They also closely oversee the organisations that actually create the financial products. However, the Act makes a distinction between financial products bought as a result of a recommendation from a Financial Adviser and" Execution Only" business.

Under Execution Only, the Adviser bears no responsibility for the products suitability for the clients needs. Execution Only is where a customer is wholly responsible for the selection of the investment and therefore the financial advisers sole responsibility is to process the purchase efficiently. You should be aware that many of the web sites promoting life insurance operate on this Execution Only basis. Sometimes the information is published on the web site and sometimes provided during a follow- up telephone call. However, most web site operators provide extensive information to enable the client to make an informed choice. Either way, within their Terms of Business the web site will have to tell you on what basis they provide financial services and as part of your application, you will normally be required to confirm that you have read those Terms.

In outline, if a customer wishes to complain, then the customer must detail the complaint in writing and send it to the Compliance Officer for the business employing the advisor. Those Terms of Business will always include details of a complaints procedure. That business then has to investigate the complaint and reply to the customer in writing. Ultimately, if the customer has suffered financial loss and cannot accept either the organisations conclusions or their proposed financial settlement, then the situation can be referred to the Financial Ombudsman. If the Compliance Officer upholds the complaint, and the customer has suffered a financial loss as a result, then the business must agree a financial settlement with the customer. The Financial Ombudsman s service is free to the customer and they are wholly independent.

The other central piece of protection for the customer is the Financial Services Compensation Scheme. The Financial Ombudsman s decision is usually binding on both parties. This provides the customer with a level of protection if a financial organisation regulated by the FSA becomes insolvent and cannot properly meet its financial responsibilities to its clients. The information is neither definitive nor exhaustive but is simply an introduction for the layman. Postscript The above information represents the legal aspects we think you will have found most useful. If you would like more detailed information relating to the regulation of life insurance companies, or financial advisers, insurance brokers you should visit the Financial Services Authority s web site at: www. fsa. gov. uk

Read more...

What Kinds Of Individual And Family Insurance Plans Are Available - Finance and Insurance Blog:

Understanding health insurance plans is very confusing for most consumers. We spoke to some of the industry experts and got answer to some of the most frequently asked questions.

Health Insurance Policies Are Available In All Varieties - Finance and Insurance:

Healthcare involves prevention, and management of, treatment illness, thereby ensuring better mental and physical health condition of an individual. Various products are made and services are designed to promote health of both individuals and groups.

So, An Umbrella Is Probably Worth It - Finance and Insurance Blog:

At some point, you have probably heard of umbrella insurance, but have no idea what it is. It is a figure of speech.