FCA has written to CEOs of insurance firms and brokers explaining the work it is carrying out in the insurance market for multiple-occupancy residential buildings.
FCA wants to ensure residential leaseholders get products that provide fair value and that premiums fairly and accurately reflect risk. FCA is looking at how firms price these insurances and whether elements unrelated to risk are driving up costs. It notes that firms do not often treat the leaseholders as the customer, but the fact is that it is the leaseholders who are likely to pay for and benefit from the policy. So it is particularly important that they get fair value as they are not in a position to shop around. FCA reminds both manufacturers and distributors of their obligations under its rules. It particularly reminds brokers that they must not be influenced by elements such as higher commissions to propose a policy that is not in the customers’ best interests or where another policy may better meet customer needs.
FCA is asking firms to consider what actions they can take to help leaseholders, perhaps by taking action as an industry. It will work with the CMA as appropriate in the course of its work. It has also been corresponding with the Department for Levelling Up, Housing and Communities.