Terence Clark takes a moment to discuss
Consumer Credit
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MLEI
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The FCA published their findings on 7th June 2013 following the thematic review into the sales of Motor Legal
Expenses Insurance (MLEI) and whilst acknowledging that these products do offer a valuable service, there were
serious concerns with the way in which they are sold.
This thematic report looked at the MLEI product from a number of perspectives, including its value and usefulness,
customer understanding and the sales process. The FCA findings and consumer research demonstrates that firms
need to re-evaluate their approach to MLEI. There are three specific areas where firms should review their current
practices to ensure they are meeting the needs of their customers.
These are:
o The basis on which MLEI is provided.
o The quality of explanation of MLEI at all stages of the customer journey, including the claims process, with an
emphasis on providing clear, appropriate information.
o The extent of cover provided.
In essence, there are 3 main issues –
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•
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Product being sold on an ‘opt out’ basis
The amount of detail about the product being given at point of sale
The understanding of what the product can and cannot do
All insurance brokers who advise or sell these products have 12 months to review their entire processes and make
adjustments as necessary. The FCA has made it clear that if there is no improvement, they will take action.
The report can be found at - http://www.fca.org.uk/news/tr13-1-motor-legal-expenses-insurance.
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