"We are still seeing too many examples of insurers and brokers lacking the right information, governance, or oversight to ensure their customers get consistently good outcomes."
- Matt Brewis, director of insurance at the FCA
Insurers and brokers have improved governance and oversight of how products are designed, managed, reviewed, and distributed, but many still cannot show how they are providing fair value to customers or that they were receiving good outcomes, the FCA says.
In a report published today, the FCA set out issues with information sharing between insurers and brokers, and in identifying target markets.
It found that many manufacturers are not adequately assessing and evidencing that their products deliver fair value and good outcomes. This means firms are not identifying any instances where their products are not delivering fair value for customers.
In addition, the FCA says most distributors do not fully understand their responsibilities to consider their remuneration, its interaction with the services and benefits they provide, and its impact on the product’s value.
In February, the FCA agreed a pause in the sale of guaranteed asset protection (GAP) insurance with a number firms, following concerns the products were not offering fair value.
In May, it was confirmed that the FCA permitted several GAP insurers to recommence sales following changes to their products.
The FCA has now warned insurers that if they cannot demonstrate that their products meet FCA rules and provide fair value, it will take appropriate regulatory action.
Matt Brewis, director of insurance at the FCA, said: "Insurers need to make sure their customers are getting fair value. Progress is being made, but we are still seeing too many examples of insurers and brokers lacking the right information, governance, or oversight to ensure their customers get consistently good outcomes.
"All insurance firms should take note of our findings and make improvements where appropriate.
"We’ll continue to take action where we see poor value so consumers can have confidence when buying insurance products."
