FCA confirms its final rules for IDD implementation
The FCA has issued Handbook Notice No 55 in which it confirms (in paragraph 2.13) the adoption of its near-final rules relating to the implementation of the Insurance Distribution Directive (IDD), subject to a few non-material changes. For more information, click here.
In addition to the above, the FCA has published a consolidated page of information about the IDD on its website, with links to all its consultation papers and policy statements on the subject. For more information, click here.
Firms still failing to meet FCA rules on consumer renewals
The FCA has warned that it will take action against firms which are failing to properly implement the renewal transparency and engagement rules it introduced for consumer business in April 2017. RAC has become the latest firm to agree to contact affected customers after the FCA found that the firm was failing to display the prior and current year premiums and the ‘shopping around’ message as key information in its breakdown insurance renewal documentation. For more information, click here.
FCA publishes its Business Plan for 2018/19
The FCA has published details of the specific areas of work it is prioritising for the next year in its annual Business Plan. Cross-sector priorities include firms’ remuneration arrangements, assessing the risks of outsourcing and treatment of existing customers. For the insurance sector, the Plan includes reference to the publication of the FCA’s interim report on the wholesale insurance broking market and the conclusion of its initial diagnostic work on distribution chains. For more information, click here.
Andrew Bailey, FCA Chief Executive, delivered a speech at the BIBA Annual Conference on 16 May 2018 in which he elaborated on certain issues featured in the Business Plan that he considered to be relevant to the insurance sector. For more information, click here.
Data Protection Bill receives Royal Assent
The Data Protection Act 2018 repeals the 1998 Act from 23 May 2018 and incorporates certain derogations to the General Data Protection Regulation (GDPR), as permitted under EU rules. Most notably for the insurance industry, the derogations include reference to the processing of special categories of data (previously referred to as ‘sensitive personal data’) for insurance purposes. For more information, click here.
BIBA and ABI issue Guiding Principles on dual pricing
BIBA and the ABI have teamed-up to issue a joint ‘Guiding Principles and Action Points for General Insurance Pricing’ document which seeks a commitment from firms to avoid excessive differences between new and renewal premiums. This is intended to apply to personal lines products with contract terms of 10 months or longer, except pet and private health insurance. It also invites the FCA to take the document’s principles into account in its work on general insurance pricing in household insurance. For more information, click here.
FOS questions whether long-standing customers are being penalised for loyalty
The April 2018 edition of Ombudsman News includes case studies which consider whether consumers which remain loyal to their existing insurer are treated unfairly by paying far more than new customers for equivalent cover. The Ombudsman also questions whether customer vulnerability may be a reason for simply renewing year after year and whether firms are addressing this possibility in their approach to renewals. For more information, click here.
FOS publishes its Annual Review 2017/2018
The Financial Ombudsman Service has published its Annual Review for the year to 31 March 2018 which highlights the themes and trends it has seen over the year in dealing with nearly 340,000 new complaints, 11% of which related to general insurance. The main themes are customer vulnerability, new technologies and consumers’ loyalty and trust in financial services providers. The report includes a detailed data analysis of complaints received and resolved. For more information, click here.
FSCS funding review finalised
The FCA has confirmed the new rules which are to apply to FSCS funding from April 2019. Product providers will be required to contribute around 25% of the compensation costs which fall to the intermediation classes. At the same time, pure protection intermediation will be moved from the Life and Pensions funding class to the General Insurance Distribution class. For more information, click here.
FCA issues guidance consultation on unfair contract terms
The FCA is consulting on new guidance outlining factors which financial services firms should consider under the Consumer Rights Act 2015 when drafting and reviewing variation terms in their consumer contracts. The regulator expects this guidance, when finalised, to be read in conjunction with the material already in the unfair contract terms library on its website. The consultation is open until 7 September 2018. For more information, click here.
FCA issues complaints data for H2 of 2017
Complaints data published by the FCA for the second half of 2017 indicates that, excluding PPI, the number of complaints firms are receiving remained stable. PPI complaints increased by 13%, which is likely to be due to the August 2019 deadline for submitting PPI mis-selling compensation claims. For more information, click here.
FCA ‘Live and Local’ regional programme continues
The FCA has announced Norwich (21 June 2018) and London (10 July 2018) as its remaining two interactive workshop dates for general insurance intermediaries before it publishes its 2018/2019 programme. The workshops are designed to help firms to identify and prevent harm. Interested firms can find further details, including how to register, on the FCA’s Live & Local webpage. For more information, click here.
FCA proposals for its regulated fees and levies for 2018-2019
The FCA has confirmed that its annual funding requirement for 2018-19 is £543.9m, an increase of 3.2%. This includes the costs it feels it needs to recover for changes to its regulated activities and EU withdrawal. For more information, click here.
FCA publishes final rules on staff incentives, remuneration and performance management in consumer credit firms
The FCA has published a response to its July 2017 Consultation Paper and final rules and guidance designed to prevent consumer credit firms’ staff management practices from causing customer detriment. For more information, click here.
FCA change of address
This summer the FCA moves offices from Canary Wharf to Stratford. From
1 July 2018, the FCA’s registered address will change to:
12 Endeavour Square
Telephone and email contact details are unchanged.
The information provided in this Newsletter is based on the Managing General Agents’ Association’s knowledge and understanding of regulatory issues at the date of publication. However, it is generic in content, and matters in UK regulation change regularly. Members should take their own professional advice in connection with any issues which could affect their business. The Managing General Agents’ Association accepts no responsibility or liability for any actions taken based on the information contained within this Newsletter.