The FCA’s Final Report on general insurance pricing practices concludes that retail home and motor insurance markets are not working well for all consumers and confirms proposals to prohibit “price walking”.
The FCA’s reforms include the following key changes:
- Firms will be prohibited from imposing a “loyalty penalty” on customers at renewal of their policy.
- This prohibition will extend to products sold alongside insurance cover.
- Manufacturers and distributors will be required to consider whether their products represent “fair value” for customers.
- Further measures will aim to stop practices that act as barriers to switching.
- New regular reporting requirements will be introduced to help the FCA’s ongoing supervision of home and motor insurance markets.
The period for responding to FCA Consultation Paper (CP20/19), which sets out its detailed proposals, closed at the end of January and the FCA intends to publish its response in Q2 2021. New rules are planned to take effect four months later.
Our summary of the FCA’s findings, proposed remedies to address failings in these markets and practical points for firms can be found here.