In this paper we set out proposed changes to the guaranteed asset protection (GAP) insurance market.
Why are we publishing this paper?
In July 2014, we confirmed our findings from the general insurance add-ons market study that competition is not effective where products are sold as an add-on and that markets for these products are broadly not working for consumers. We proposed four remedies, one of which relates specifically to the GAP market. You can find out more about our market study by following the link below.
The objectives for the proposals set out in the paper are to reduce the advantage enjoyed by the add-on distributor and to empower customers to make informed and active decisions on whether to buy GAP insurance and, if so, from where.
CP14/29 Guaranteed Asset Protection insurance [PDF][1]
Who should read this paper?
The paper will be of primary interest to any firm that distributes add-on GAP insurance in connection with the sale of a motor vehicle, as well insurers and other firms involved in the distribution chain. This paper will also be of interest to firms involved in the sale of standalone GAP insurance, motor finance, motor insurance and more generally the sale of motor vehicles.
Our proposals will affect whether and how retail and commercial customers are offered GAP insurance when purchasing a motor vehicle.
Next steps
We want to know what you think of our proposals and welcome comments using our online response form[2] by 13 March 2015.