Fidelity calls for ABI to ban unsolicited sales mailouts

The Association of British Insurers (ABI) does not go far enough to protect consumers’ interests when purchasing annuities, Fidelity has said.

The ABI yesterday published proposals for a voluntary code of conduct for insurers to encourage 'shopping around' for annuities at retirement.

But Richard Parkin, head of proposition at Fidelity's defined contribution (DC) and workplace savings business, said the organisation's proposals do not go far enough.

"We are disappointed some providers would not agree to remove unsolicited own rate illustrations," said Parkin.

The draft code introduced some restrictions on illustrations of pension products insurers send unsolicited to consumers.

The ABI suggested requiring insurers to make the illustrations easy to compare and include references to enhanced annuities, even if the provider does not sell them.

However, Parkin said unsolicited illustrations should not be sent out at all.

"We are concerned that these [proposed rules] are not prescriptive enough to remove bias to the products offered by the customer's existing provider," he said.

"There is nothing wrong with sending illustrations on customer request but we believe that unsolicited own rate illustrations simply cannot be in the customer's best interest."

The ABI also proposed that insurers should send a standard statement on the benefits of shopping around for an annuity on the first page of all communications with customers.

Providers' sales processes should take annuity customers through the key questions they should consider when buying an annuity, the association proposed.