Protection

FCA threatens action against GI firms flouting renewal rules

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3rd April 2018
"It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules."

The FCA has warned it will take action against general insurance firms who are failing to properly implement rules introduced to increase transparency and encourage shopping around at renewal time.

The rules, introduced in April 2017, require firms to clearly show the insurance premium a customer paid last year alongside their proposed renewal premium. They also require firms to show a "prominent, clear and straightforward message" to encourage customers to shop around.

The FCA has found that firms are still failing to properly implement the rules, despite previous warnings in October after finding firms failing to implement the new rules for all products and customers, as well as misstating the previous years’ premium.

RAC has become the latest firm to agree to contact affected customers after the FCA found that the firm was failing to display the prior and current year premiums and shopping around message as key information in its breakdown policy renewal documentation.

The regulator says it expects firms and senior management in those firms "to take immediate action to ensure they are compliant".

Jonathan Davidson, executive director of supervision – retail and authorisations at the FCA, said: “It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules. Firms failing to get this right may have led to consumers losing out as they do not have the right information to decide whether or not to shop around.

“We have already acted where we have seen particularly poor practice in firms and will continue to do so where we see firms not being transparent. As we said in October, we expect other firms to take notice of these issues, to look at what they are doing and to make sure they are getting it right.”

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