Following its scathing review of the quality of general house and motor insurance advertising in January, Paul Anning finds the FSA to be in a better mood after finding that insurers have cleaned up their act.
Who: Financial Services Authority
Where:London
When: July 2007
Law stated as at: 31 July 2007
What happened:
The FSA carried out a review of all home and motor insurance advertising appearing in the national press over a ten day period in April. The review found 94% of the ads to have "fairly and accurately described" what savings customers would be able to achieve. The review shows a dramatic turnaround in advertising practice since the publication of the FSA's 'Thematic Review' in January, in which the regulator found an alarming 45% of press adverts to contain misleading 'savings claims' (see April edition of Marketing Law).
Why this matters:
There are three reasons why this matters:
- shape up and fast – those firms whose advertising remains below the required standard have been told by the FSA that they must take "immediate steps" to deal with the regulator's concerns now;
- consistent performance – although the regulator is clearly pleased with the swift improvements made by the majority of insurers, it was swift to point out that it "will be watching" to ensure that standards remain consistently high; and
- focus on approach – when it comes into effect in November 2007 the FSA's new, more principles-based approach to financial promotions for investment products will place greater obligations on the senior management of firms to be pro-active in ensuring that they treat customers fairly when selling insurance through print, broadcast and other advertising means.
