A LONG-AWAITED code of practice for the life assurance industry, proposed in the wake of the £11 billion personal pensions mis-selling scandal, has been condemned by some insurance companies as “too little, too late”.

After two years of consultation, the Association of British Insurers (ABI) yesterday launched its voluntary code, which aims to set minimum standards for the sale of life assurance, pensions and investments.

But nearly a quarter of insurance companies, including Legal & General, have failed to sign up to the code. One insurer even acknowledged privately that the Financial Services Authority, the chief financial watchdog, was less than enamoured with the scheme.

Virgin Direct said: “We understand where the ABI is coming from but we have serious reservations on whether it will deliver for consumers. We think the scheme will be bureaucratic and full of compromises and will take a long time to deliver the goods.”

The ABI defended the overdue code, saying that its initiative offered real benefits for consumers. Mary Francis, director-general of the ABI, said: “These new standards are designed to strengthen consumer confidence and thereby encourage more saving. The Raising Standards scheme represents a major milestone for the industry.”

Among the new quality benchmarks are plans to improve the clarity and comparability of financial information, better complaints handling and the abolition of unfair charges. The cooling-off period during which consumers can change their minds will be extended from 14 to 30 days.

An independent body called the Pensions Protection and Investments Accreditation Board has been established, which will be responsible for policing the code.

The ABI also unveiled its new quality mark. Life insurance companies that want the seal of approval will have to spend hundreds of thousands of pounds on meeting the various minimum service standards, costs which will be passed on to consumers. The first quality mark awards will be announced in autumn 2001.