The Financial Services Authority (FSA) has set a deadline of March 17th 2006 for the PPI industry to put measures in place to improve pricing, compliance, choice of products, competition and transparency.
The FSA, the Consumer Association and the Office of Fair Trading (OFT) have all expressed concern about the current state of the payment protection insurance sector.
Members of the Council of Mortgage Lenders (CML) executive committee received details of the deadline in a restricted Memorandum, which reveals that the FSA held a meeting with trade bodies on December 19th last year.
The FSA wants the industry to introduce its own voluntary measures to address issues of concern, but has stressed that it will impose its own rules on PPI if no action is taken.
The OFT has announced an investigation into PPI and the FSA found that one in three companies assessed by the regulator was failing to comply with mis-selling rules.