In its latest multi-firm review, FCA has reviewed the manner in which general insurance firms have implemented transparency rules in insurance renewals. The rules apply when a firm sends a general insurance renewal notice to a consumer, and came into effect in April 2017.
FCA noted ‘a range of concerns’ and identified four key areas in which firms were failing:
- providing incorrect premium information – for example firms did not always take into account prior adjustments to the premium;
- failing to present the premiums and shopping around message clearly, accurately and in a way which draws the reader’s attention – the review noted some firms missed prescribed wording or added dis-incentivising wording;
- not implementing the rule changes for all products and customers, often due to IT system failings; and
- failing to properly identify a ‘renewal’ as defined by the rules, and therefore not complying with the transparency information requirements at all.
FCA reiterated that it expects firms to ensure their processes and documentation are compliant, and with sweeping changes involved in the implementation of IDD and SMCR around the corner, emphasised that ‘under-preparation for major regulatory change is not acceptable.’