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The Financial Conduct Authority (FCA) has published Policy Statement 16/21 which reports on the main issues arising from Consultation Paper 15/41 and confirms the final rules and non-Handbook guidance designed to increase transparency and engagement at renewal in the general insurance market.
Proposed measures in CP15/41 went across all retail general insurance products and included: disclosure of last year’s premium at each renewal; inclusion of text encouraging consumers to check their insurance cover and shop around; and firm’s provision of a prescribed shopping around message to consumers who will be renewing with a firm for the fourth consecutive time.
The FCA said it was proceeding with the proposals set out in CP15/41 but that it had made some changes in response to the feedback received (113 responses in total were submitted):
- This includes a new requirement that where a consumer’s circumstances have changed during the course of holding their policy, firms must give an annualised premium reflecting any mid-term adjustments (MTAs), instead of last year’s premium. Where there have been no MTAs firms must give the consumer the premium they started the current policy with.
- An amendment to the ‘shopping around’ disclosure that firms must provide, so that consumers are encouraged to consider cover when shopping around as well as price. The reminder now reads: You have been with us for a number of years. You may be able to get the insurance cover you want at a better price if you shop around’.
- Ten-month policies have been brought within the scope of the requirements.
Members may access PS16/21 by clicking here.
The implementation deadline has been extended by three months to 1st April 2017 in order to allow firms more time to comply with the new requirements.
BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk
The post FCA pushes ahead with plans to increase transparency and consumer engagement at renewal appeared first on British Insurance Brokers' Association.
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