FSA Publishes Loans Insurance Guidance

New guidance for people looking to take out Payment Protection Insurance (PPI) on their loans is to be offered by a financial regulator.

The Financial Services Authority (FSA) has announced that pricing advice will now be made available on its website, giving consumers information on the various PPI policies currently on the market.

The loan cover has proved controversial in recent times, with many providers alleged to have miss-sold the insurance to customers; last month, the Competition Commission also said that consumers were being overcharged for PPI by around £1.4 billion per year.

Currently, the insurance - which covers loan repayments if the holder suffers a sudden life event which puts his or her ability to pay in jeopardy - is not paid out for 20 per cent of claims, including many who were sold PPI when it was unsuitable for their circumstances.

Commenting on the new tables, a spokesman for the FSA said that the tables were "a starting point to give customers basic information about what the polices offer and what they cost".

"PPI is almost always optional and consumers need to consider their own financial circumstances when deciding to purchase it and make sure they are clear about what will be covered," he added.