Endowments and beyond – pushing the complaints envelope

In previous articles, Adam Samuel has looked at the basic nuts and bolts of safe endowment complaint handling. This month he looks in more depth at the problems arising from critical illness deductions and limitation.

Adam Samuel BA LLM MSFA MAQ, compliance and complaint handling consultant and trainer, can be contacted on tel 020 7586 1938; email AdamSamuel@aol.com, website www.adamsamuel.co.uk

Critical illness deduction

Actuarial consultants have expressed concerns that when doing calculations they have been asked to make a deduction for the cost of critical illness cover contained in an endowment. In essence, the FSA Guidance in DISP App 2 allows firms to deduct the cost of life cover where an investor would have taken out decreasing term assurance to repay the loan. Some firms argue that clients would have bought critical illness cover regardless of which type of mortgage they had bought. This is quite cute since it would cover single people without dependants.