FCA’s NEW GI Pricing Practices, Product Governance and Product Value
In this comprehensive and interactive webinar, Branko Bjelobaba FCII focuses on the long-awaited policy statement published by the FCA - General Insurance Pricing Practices Market Study – Feedback to CP20/19 and Final Rules (PS21/5). The 87 pages of new rules address what has been described as the ‘loyalty penalty’ paid by existing general insurance product customers and aim to ensure that customers receive fair value in the insurance products they buy and this includes commercial insurances where distribution and remuneration arrangements will come under the spotlight.
This is of crucial concern for the London Market where such arrangements will have to be closely examined (who is in the chain, what they do, what they get paid and whether this is commensurate with what they do and how this provides value to the end customer) and signed off by distributors at least once every 12 months.
The rules introduce a package of market remedies which include:
- A requirement that when a firm offers a renewal price for home and motor it can be no greater than the equivalent new business price for a new customer;
- Additional product governance rules that require firms to deliver products that offer fair value to all customers – personal and commercial lines;
- Rules to enable firms to offer accessible and easy options for customers wishing to cancel auto-renewal;
- Onerous reporting requirements to support the ongoing supervision of the home and motor insurance markets.
The rules relating to systems and controls and product governance will come into effect on 1 October 2021 (i.e. in just over two month’s time). The rules on pricing, auto renewal, premium finance and reporting will come into effect on 1 January 2022, with a transitional provision (until 17 January) for the rules on pricing and auto renewal disclosure.
- The new rules to end ‘price walking’ whereby existing customers pay more than new customers;
- What significant changes to internal policies have to be made;
- What product governance arrangements will be including existing distribution arrangements;
- An understanding of “value” when it comes to all forms of general insurance.
Please contact Gemma Warren (07436 263847) with any queries regarding this event.
- Online event
You will be sent a confirmation email shortly after booking. If you have not received this within one hour, please contact Gemma Warren (07436 263847).
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