FCA: Insurance firms still failing to meet FCA general insurance renewal rules

03 April 2018

The Financial Conduct Authority has warned it will take action against general insurance firms who are failing to properly implement rules introduced to increase transparency and encourage shopping around at renewal time.

The rules, introduced in April 2017, require firms to clearly show the insurance premium a customer paid last year alongside their proposed renewal premium. They also require firms to show a prominent, clear and straightforward message to encourage customers to shop around. The FCA has found that firms are still failing to properly implement the rules despite warning in October about failings.

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 shopping around message as key information in its breakdown policy renewal documentation.

The FCA outlined in October 2017 how firms were failing to meet the rules, highlighting four particular areas where it found firms were failing.  These were:

• failing to implement the new rules for all products and customers;
• misstating the previous years’ premium;
• leaving out the shopping around message or not presenting it in a way which draws the reader’s attention; and
• firms failing to properly identify all customers who needed renewal information either because of system error or a mistaken interpretation of the type of customer that is captured  by our rules.

The FCA expects firms and senior management in those firms to take immediate action to ensure they are compliant.

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