So they can talk clearly after all

By Melanie Bien

Any attempt to introduce higher standards of service is to be welcomed, as long as it doesn't add an unnecessary level of bureaucracy. As flesh was added to the bones of the new Quality Mark scheme for insurance companies last week, the industry's efforts to prevent consumers feeling that they are being ripped off seemed admirable.

Any attempt to introduce higher standards of service is to be welcomed, as long as it doesn't add an unnecessary level of bureaucracy. As flesh was added to the bones of the new Quality Mark scheme for insurance companies last week, the industry's efforts to prevent consumers feeling that they are being ripped off seemed admirable.

The Raising Standards Quality Mark scheme, part of the Savings and Long-Term Risk (SALTR) initiative, aims to lift standards across the industry. But as the Association of British Insurers and those insurers backing the scheme explained how it would work, it was hard not to get more than a little annoyed.

The first "promise", as they like to call it, is to communicate in clear language to customers. Why the hell aren't they doing that anyway? If they know policy documents are confusing, some- times misleading and generally impenetrable then why haven't they sorted it out already? Such confusing language creates a lack of understanding about exactly what you are committing yourself to. Far from empowering us as consumers, it leaves the door open to mis-selling. It's simply not good enough that they need to launch an expensive new initiative with bells and whistles so that we feel confident about them doing something which they should have done years ago.

As you read down through the list, the promises all seem a little obvious. And as for plans to "inform you regularly about how your products are doing" and "set out the benefits and costs of products clearly" - well, is that really too much to ask? Shouldn't it be part of the service anyway? After all, we pay enough for pensions, insurance and life policies. The least the provider can do is keep us up to date with how they are performing.

It will be interesting to see how the abolition of charges, such as bid/offer spreads, will work out in practice, and what will replace them. If pricing had to be so complicated in the first place, how come insurers can now abolish it and replace it with a simpler structure? Surely the industry wouldn't be using an unnecessarily complex system - or would it?

The success of the initiative will depend on its take-up. At the moment, 78 per cent of insurers are behind the scheme. The remainder, including Virgin Direct, are unhappy with the proposals, which means they aren't planning to pay up to £300,000 so that the accreditation board can decide whether their products meet the benchmark standards.

Consumers may welcome the scheme eventually, but they need to understand it first. That is the ABI's biggest task; it remains to be seen whether it will be successful in achieving it.

* m.bien@independent.co.uk