FCA has written to the Boards of Directors of insurers setting out its views on the key risks of harm that personal and commercial lines insurers can post to their customers and the markets. It is telling firms about its views as addressing them will form part of its supervisory strategy for the next year.
FCA says the risks it has identified will require firms to deliver a “step-change” in their culture, and to significantly improve their governance and operational controls. It specifically stresses that it expects all firms to have reviewed their customer journeys to ensure they meet regulatory requirements, not least the changes the IDD introduced. It also expects Boards to hold firms and senior management to account on engaging with and delivering regulatory change.
FCA is particularly concerned about:
- poor oversight and remuneration practice within distribution chains
- providing consumers with unsuitable or poor value products
- poor pricing practices
- ineffective regulatory change management and
- poor operational controls
It has already circulated reports on many of these issues, and expects firms to have considered them.
Finally, FCA says it expects that the Brexit implementation period will end on 31 December 2020 and that firms should consider how the end of the period will affect them and their customers.