December saw the publication of CP15/41: Increasing transparency and engagement at renewal in general insurance markets.
The Consultation Paper can be accessed here
The paper sets out the FCA’s proposals to introduce new rules and guidance for firms and the steps they should take when renewing general insurance policies. The proposals are an attempt to address concerns about a relative lack of consumer engagement at renewal, and the lack of competition that results from this. This can lead to consumers simply defaulting to renew products that are no longer suitable or do not represent good value.
The FCA is proposing:
- Rules that require firms to disclose last year’s premium on renewal notices;
- Rules that require additional disclosure when customers have renewed the same product four times or more;
- Guidance on how firms can improve their processes around renewals;
- Guidance about records that firms maintain to demonstrate compliance, including a record of premiums.
The measures are intended to apply to retail customers (consumers) and the regulator is aiming for an implementation date of 1st January 2017.
As part of the consultation process, the FCA has highlighted two other specific publications:
- Occasional Paper No.12: Encouraging consumers to act at renewal: Evidence from field trials in the home and motor insurance markets, which can be accessed here
- Discussion Paper DP15/5: Smarter consumer communications, which can be accessed here