FCA’s NEW GI Pricing Practices, Product Governance and Product Value PS21/5
The FCA has just published the long-awaited policy statement General insurance pricing practices market study – Feedback to CP20/19 and final rules (PS21/5). The final rules address what has been described as the ‘loyalty penalty’ paid by existing general insurance product customers and aim to ensure that customers receive fair value in the insurance products they buy.
The rules introduce a package of market remedies which include:-
- A requirement that when a firm offers a renewal price to a customer it can be no greater than the equivalent new business price for a new customer;
- Additional product governance rules that require firms to have processes in place to deliver products that offer fair value to customers with these new processes applying to all general insurance and pure protection products;
- Rules to enable firms to offer accessible and easy options for customers wishing to cancel auto-renewal;
- Onerous reporting requirements to support the ongoing supervision of the home and motor insurance markets.
The rules relating to systems and controls and product governance (in addition to premium finance) will come into effect on 1 October 2021. The rules on pricing, auto‑renewal and reporting will come into effect on 1 January 2022, with a transitional provision (until 17 January) for the rules on pricing and auto‑renewal disclosure.
Learning objectives - by the end of this webinar you will gain an overview of:-
- The new rules to end ‘price walking’ whereby existing customers pay more than new customers;
- What significant changes to internal policies that have to be made;
- What product governance arrangements will be including existing distribution arrangements;
- Above all, an understanding of “value” when it comes to all forms of general insurance.
It is relevant to anyone working in general insurance to include brokers and insurers and anyone with an interest in this area.
Branko Bjelobaba FCII started his insurance career in 1987 and has worked across the sector including stints at PwC and GISC and has led his own consultancy practice since 2004. He works closely with AMII (retained compliance consultant since 2004), BIBA and the CII and has provided many well-received (even entertaining!) training events throughout the UK. He is a recipient of the Thomson Reuters Compliance Personality of the Year Award and the London Market People Award for Legal and Compliance.
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