A ban on the sale of payment protection insurance at the same time as credit cards, loans and mortgages will go ahead, the competition watchdog said.
Providers will instead have to wait seven days before they can contact customers to sell them the insurance, the Competition Commission confirmed.
The move upholds an earlier ruling it made on plans for a point-of-sale prohibition, which was subject to an appeal by Barclays.
The Competition Commission is also introducing a package of measures to boost competition in the market, including personal PPI quotes for consumers, annual statements on the cover and better information to make it easier for people to shop around and switch provider.
It is also banning the sale of single premium PPI policies, in which the cost for the entire term of the policy is paid upfront and usually added to the debt being taken out.
Barclays had argued that the point-of-sale ban was not justified by the evidence collected by the commission and failed to consider the inconvenience that could arise for consumers.
But the commission said that having reviewed the evidence it had come to the clear view that customers would benefit "significantly" from the reforms it was proposing.
It said the changes would mean PPI providers would face real competition and as a result the cost of the cover would fall significantly.
Payment protection insurance covers debt repayments if the holder is unable to work due to an accident or illness, or if they lose their job or die.
The product has come in for criticism after research found it had been mis-sold to many consumers who would never be able to claim on it, while others felt pressurised into taking it out.