Insurance price comparison sites to be probed by FSA

Following concerns that were raised by the British Insurance Broker’s Association the UK’s financial regulator, the Financial Services Authority, is to launch an investigation into price comparison sites that deal with insurance services. BIBA officials have claimed that the way that these sites work can end up misleading consumers.

According to officials from BIBA the way in which these sites operate could be misconstrued as giving advice on insurance, which is something that these sites are not regulated to do, although they are allowed to arrange insurance. Reports suggest that many of the consumers that have used insurance price comparison sites have been under the impression that the sites were regulated in the same way as insurance brokers.

BIBA originally put in a complaint about insurance price comparison sites a couple of years ago, when the number of sites in operation were rapidly growing, but at this stage no action was taken by the FSA. However, officials from the FSA stated: ‘In the light of the evidence from Biba we think now is the right time to have another look.’

The investigation will apply to price comparison sites that deal with insurance services following concerns that customers are basing their decision on price alone rather than also on suitability.