A nightmare just around the corner - Money - The Independent

A nightmare just around the corner

IF YOU think buying insurance is a nightmare, you have seen nothing yet. Your worst fears will soon be realised when you discover what the European Union has in store for us.

From 1 July the Insurance Single Market will be introduced. This means that the Brussels bureaucrats will be let loose over here.

The consumer will be hit with a barrage of wealth warnings when buying insurance. But there is nothing as simple as 'The value of shares can go down as well as up' or 'Your house is at risk if you do not pay your mortgage'. You will need a lesson in gibberish to work out what on earth the Department of Trade and Industry, acting on Brussels orders, is trying to warn you about.

The wealth warning on advertisements will read: 'Before entering into this contract of insurance you should consider whether there is any scheme or equivalent protection applicable to the contract of insurance which is intended to guarantee the payment of claims to policyholders under the contract in the event that the insurer is unable to meet these obligations'.

We asked the DTI what it was trying to warn us about. A spokesman said: 'If you see a health warning, even if you do not completely understand it, it makes you consider what you are doing before you do it.

'What we are saying is, when you buy insurance you should satisfy yourself of the financial viability of the company. Ask searching questions.'

What sort of questions are you supposed to ask?

A spokesman for one insurance company said: 'The whole thing is ludicrous. Do you ring your bank and ask them if they have enough money to clear your cheque?'

The legislative changes are in a consultative document. Comments are required by the end of February, ready for implementation in July.

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