South: HWB warns insurers to heed warning from regulator
Insurers and other FCA-regulated organisations across the south should review their practices to avoid risking financial and reputational damage in the wake of a warning siren from the regulator, says HWB director Alan Williams.
The Financial Conduct Authority (FCA) has warned it will take action against general insurance firms that “fail to properly implement rules introduced to increase transparency and encourage shopping around at renewal time.” The warning refers to the FCA’s rules, introduced in April 2017, that outlined firms must clearly show the insurance premium a customer paid last year alongside its renewal premium. It also means firms must show a straightforward message that encourages customers to shop around.
The FCA has highlighted four areas where it believes some firms are failing. These are:
- Failing to implement the new rules for all products and customers.
- Misstating the previous years’ premium.
- Leaving out the shopping around message or not presenting it in a way which draws the reader’s attention.
- Firms failing to properly identify all customers who needed renewal information either because of system error or a mistaken interpretation of the type of customer captured by the rules.
Alan Williams, who specialises in compliance for FCA regulated businesses, said: “The pressure is on for all FCA regulated companies, and in this case insurance firms, to ensure they have bulletproof compliance.
“The risk of non-compliance is potentially very costly and we have seen the fallout for some companies which have been left having to salvage their reputation for failing to meet the rules.
“The general direction of travel across financial services is towards transparency, fairness and accountability, so I would urge all FCA-regulated firms to ensure they are able to robustly meet these requirements."
