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Latest news | MP seeks reform over unfair funeral payments

Latest news

MP seeks reform over unfair funeral payments

Stewart McDonald MP asked the Treasury to take legislative steps to prohibit funeral expenses insurance plans from paying out less to customers than has been paid in.

In response, Simon Kirby, Economic Secretary said;

"Funeral expenses insurance is a commercial product and the Government does not believe it would be appropriate to interfere in the market in the way the Honourable Member for Glasgow South describes.

"The respective capabilities of insurers to assess risk is a key element on which they compete and helps to ensure there is a diversity of products and efficient pricing in the market.

"It is important that consumers understand the nature of their funeral cover insurance policies. The Financial Conduct Authority (FCA), which regulates the insurance industry, has produced an Insurance Conduct of Business Sourcebook (ICOBS) in order to set the standards required of insurance firms in relation to their business. ICOBS rules include a requirement that customers are given all the appropriate information required to make an informed decision ahead of purchasing an insurance product.

"The rules also state that communications should be clear, fair and not misleading. This means that where there is a possibility that a funeral plan may pay out less than was paid in, this must be clearly disclosed to the consumer before they purchase the product."

Click here to see the full response to the question

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