FCA New Rules for Pricing Practices
The FCA has released its Policy Statement and final rules on general insurance pricing practices. The FCA has largely implemented the policy as set out in its earlier Consultation Paper but has made some concessions around reporting and timings having received over 100 responses to the Consultation.
The FCA is attempting to ban what is known as ‘price-walking’ (charging renewing consumers more than equivalent new business consumers ). The objective in this regard is to ensure that customers do not end up paying higher premiums because they do not switch provider. They have also looked at how firms ‘auto-renew’ consumers as well as how products offer fair value.
The Policy Statement follows on from the FCA’s previously published papers in relation to pricing practices and value measures:
- MS18/1.3 - General insurance pricing practices market study – Final Report
- CP20/19 - General insurance pricing practices market study – Consultation on rule changes
- PS20/9 - General Insurance value measures reporting and publication – Policy Statement
The remedies implemented by the FCA aim to enhance competition and protect home and motor insurance consumers from so-called ‘loyalty penalties’, with new rules so that renewal quotes for home and motor insurance consumers are not more expensive than they would be if the customers were new customers, through the same distribution channel (described as the ‘Equivalent New Business Price’ – or ENPB).
There are elements of the new rules which:
- build on existing product governance requirements;
- which echo themes of ‘fair value’ discussed in the FCA’s publications in relation to insurance value measures;
- cut across the Regulator’s requirements in relation to appropriate outcomes (including those for vulnerable customers) and acting in the better interests of customers; and
- are included in the FCA’s current consultation in relation to its proposed new Consumer Duty
By the end of this webinar delegates will identify the requirements in more detail, the likely impact on their business model and what the practical steps are in order to achieve compliance.
Please note: This event is a regional collaboration between the local institutes in the area. Your booking details will be shared with the Insurance Institute of Chelmsford and South Essex, which is acting as the host institute for this event.
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