What's happening at the FCA

The latest news and views from UKGI on FCA activity...

The FCA certainly seems intent on keeping up levels of activity in the general insurance market, with a range of regulatory developments and proposals - whether it's changes to the sale of add-ons, proposed changes in the way renewal information is communicated or the latest proposals for testing value measures for general insurance products. Not to mention the Insurance Act 2015...

So, what’s on the table at the moment?

Feedback Statement on DP15/4 – General insurance value measures

In its Feedback Statement published on 1st March this year, the FCA summarises the responses it has received to the options it set out in its June 2015 Discussion Paper on general insurance add-ons and outlines its next steps.

Having considered the feedback to its original Discussion Paper, the FCA has decided to take forward a scorecard as its preferred option for presenting measures of value. The scorecard will include claims frequencies, claims acceptance rates and average claims payouts, potentially with the inclusion of an average premium metric.

Rather than point-of-sale disclosure to consumers, the Regulator still prefers publication as a market transparency remedy. The FCA considers the scorecard could give users a wider breadth of information about GI products sold to consumers, while reducing some of the risks and costs associated with the claims ratio.

The Insurance Act 2015

The Insurance Act 2015 (the Act) is the result of a joint review by the Law Commission and Scottish Law Commission into insurance law. It introduced substantial changes to the laws governing disclosure in non-consumer insurance contracts; warranties and other contractual terms; and insurers’ remedies for fraudulent claims for both consumer and non-consumer contracts. These will come fully into force on 12 August 2016.

The Insurance Act 2015 impacts largely on commercial insurance contracts and the relationship between brokers and their commercial clients; it follows on from the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA).

Whereas CIDRA covered consumer insurance contracts, the Insurance Act 2015 (the Act) impacts mainly on commercial insurance contracts although there are some sections which do apply to both types of customer.

Increasing transparency and engagement at renewal in general insurance markets

In early December 2015, following concerns that consumers do not adequately consider their options at policy renewal, the FCA published Consultation Paper CP15/41 (Increasing transparency and engagement at renewal in general insurance markets).The CP sets out proposed new rules and guidance relating to the renewal process for all general insurance products purchased by consumers (retail customers).  The proposed requirements will apply to the firm (insurer or intermediary) which provides the renewal communications to the customer.

This is a detailed consultation paper, likely to impact the majority of firms, with proposals ranging from additional mandatory disclosures to guidance on record keeping requirements. 

General Insurance Add-ons – FCA finalises remedies, final rules and guidance

Following its market study into the sale of add-ons in 2014, the FCA found that competition was not effective or working in the best interests of customers. Four remedies were proposed to address this:

  1. Introducing a deferred opt-in for GAP insurance - now in effect
  2. Introducing value measures across the general insurance market (see above)
  3. A ban on opt-out selling
  4. Improving the information provided to customers buying add-ons

In its Policy Statement PS 15/22, the FCA is now implementing proposals 3 and 4.  Its ban on opt-out selling of add-ons should come as no surprise, given the Regulator’s rhetoric on this issue.  However, what may come as a surprise is that the FCA has now confirmed that optional extras (such as accidental damage on household policies) come within the definition of an add-on. 

1st April 2016

  • Ban on opt-out comes into force
  • Firms expected to comply with Handbook guidance

Not to mention changes to complaints, thematic review of delegated authorities/outsourcing, activity with ARs...

As you can tell, there's a lot going on and in a changing environment it pays to have the right advice and support. Call us; we can help guide you through the changes, understand the implications for your business and keep you up to date.

Latest FCA related content

Transparency & engagement at renewal in general insurance markets

At the end of last year, following concerns that consumers do not adequately consider their options at policy renewal, the FCA published Consultation Paper CP15/41 (Increasing transparency and engagement at renewal in ge... Read more...

The Insurance Act 2015 Guidance

The Insurance Act 2015 (the Act) is the result of a joint review by the Law Commission and Scottish Law Commission into insurance law. It introduced substantial changes to the laws governing disclosure in non-consumer in... Read more...

General Insurance Add-ons – FCA finalises remedies, final rules and guidance

Following its market study into the sale of add-ons in 2014, the FCA found that competition was not effective or working in the best interests of customers. Four remedies were proposed to address this: Introducing a... Read more...

Changes to the Complaint and RMAR Returns and standing data requirements

The FCA has made a number of changes, and has put forward one additional proposed change, to the Complaint and RMAR Returns and the standing data requirements.  These can be grouped under the following headings:... Read more...

Premium rate numbers for complaints prohibited from 26/10

A reminder that from 26th October this year premium rate numbers can no longer be used for complaints and other post-contractual calls. Financial services firms will not be allowed to charge a consumer who has entered in... Read more...

The Insurance Act 2015

The Insurance Act 2015 impacts largely on commercial insurance contracts and the relationship between brokers and their commercial clients; it follows on from the Consumer Insurance (Disclosure and Representations) Act 2... Read more...

FCA focus on delegated authorities and outsourcing

The results of the FCA’s Thematic Review (TR15/7) into delegated authorities in the general insurance market, although particularly significant for insurers and underwriters, also affects brokers.  Specificall... Read more...

Impact of the Consumer Rights Act

The Consumer Rights Act 2015 (CRA) comes into force from 1 October 2015 and will impact contracts entered into after this date. It reforms and consolidates existing UK consumer rights law in relation to: The provisi... Read more...

Regulation round-up

Our recent round up outlines a number of significant developments or announcements from the FCA and other relevant bodies as follows: FCA finalisation of its fee and levy requirements; Implementation of the Dere... Read more...

FCA revises enforcement action criteria following review

The FCA has updated the criteria and outlined the process it uses when deciding whether to refer a firm or individual to its enforcement division for a formal investigation. This follows an HM Treasury review in December... Read more...

New rules applying to the sale of GAP effective 1st September

New rules affecting how and when GAP insurance can be sold come into effect from 1st September 2015.  The gist of the new requirements is to introduce a deferral period and includes mandatory prescribed information.... Read more...

Important changes to DISP - effective 9th July 2015

Changes to DISP come into effect at the beginning of July which impact complaints communications and firms’ websites and possibly terms of business. The changes to DISP will impact all firms which could receive or... Read more...

FCA Thematic Review on SME Claims Handling

Building on the back on work in the retail claims arena last year the FCA has concluded an investigation into claims handling for SMEs and the findings make disappointing reading. Key concerns highlighted in the review w... Read more...

Consumer Credit Support

Applying for FCA Direct Authorisation or Variation of Permission. The Consumer Credit regime moved from the Office of Fair Trading (OFT) to the FCA in April 2014. There is a big shift in the way consumer credit is... Read more...

FCA publishes latest complaints information

The FCA has published its latest complaints data. The FCA requires firms which receive 500 or more complaints in a six month period to publish the information on their websites. Key statistics include: Financial servic... Read more...
One in five motor dealers does not plan to apply for full FCA authorisation – survey

One in five motor dealers does not plan to apply for full FCA authorisation – survey

Following a survey of 200 dealerships by Close Motor Finance in June, AM Online reports that 86% of firms plan to apply for full FCA authorisation when their interim permission expires. However for those not intending... Read more...
FCA fines Stonebridge International Insurance Limited £8.4m in relation to sales of insurance policies

FCA fines Stonebridge International Insurance Limited £8.4m in relation to sales of insurance policies

The FCA final notice outlines that between April 2011 and December 2012, Stonebridge targeted low and middle income customers without college degrees or professional qualifications, with its personal accident, accident... Read more...
FCA sets out its financial promotions to social media

The FCA sets out its approach to financial promotions on social media

The FCA is consulting on proposed guidance in relation to social media which is open for feedback until 6th November. The consultation emphasises that the FCA’s financial promotion and communication requirements... Read more...
Manage your conflicts of interest with our focused review visit

Manage your conflicts of interest with our focused review visit

Protect your business with our on-site review, designed specifically to help identify, manage and monitor conflicts   The FCA’s message on conflicts is clear: “We expect all general insurance intermedi... Read more...
Jill Hambley - Compliance Consultancy Services Director

Conflicts of interest thematic review – what does it mean?

In the light of the FCA’s recent thematic review, UKGI's Compliance Consultancy Services Director Jill Hambley, gives her view on conflicts of interest for the insurance broker. At the end of May, the FCA pub... Read more...
Guide to complaints handling when using a claims management company

Guide to complaints handling when using a claims management company

Claims Management Regulator (Ministry of Justice), the Financial Conduct Authority, the Financial Ombudsman Service and the Financial Services Compensation Scheme have issued a guide on complaints handling. The g... Read more...
FCA issues its first warning notices

FCA issues its first warning notices

Although not directly related to general Insurance firms, it is worthy to note that the FCA has published its first warning statements against two individuals in relation to the treatment of interest rates. The power t... Read more...
FCA issues largest ever retail fine to HomeServe

FCA issues largest ever retail fine to HomeServe

The FCA has issued its largest ever retail fine of £30,647,400 against HomeServe as a result of ‘serious, systemic and long running failings, extending across many key aspects of its business’. ... Read more...
5 big compliance issues you can't ignore in 2014 [Video]

5 big compliance issues you can't ignore in 2014 [Video]

Following the success of our 2013 guide, UKGI Technical Compliance Consultant, Helen Dean, looks ahead to the issues we'll be featuring in our 2014 guide. Be among the first to recieve our full guide when it is pub... Read more...
5 big compliance issues of 2013: the review

5 big compliance issues of 2013: the review

Back in early 2013, we published the guide ‘5 big compliance issues you can’t ignore in 2013’ which provided an overview of the 5 biggest compliance developments we believed would impact firms during... Read more...
6 FCA reviews that should be on your radar

6 FCA reviews that should be on your radar

The Regulator is extremely active at the moment with a number of thematic reviews and market studies underway. Here are 6 thematic reviews that, if you’re an insurance broker, should be on your radar: Themat... Read more...
FCA 2013 insurance fines soared 160% to £44.6m

Insurance Age: FCA 2013 insurance fines soared 160% to £44.6m

Insurance Age reports that FCA fines on the insurance sector soared by some 160% to £44.6m last year, compared to the £16.9m during 2012. The FCA promised that they would be a more proactive and intrusive R... Read more...
FCA publishes finalised guidance on inducements for product providers and advisory firms

FCA publishes finalised guidance on inducements for product providers and advisory firms

The FCA has issued guidance on incentives for product providers and advisory firms alongside the separate FCA thematic review into broker conflicts of interest which is on-going. The publication of the guide follows th... Read more...
Good practice guide for mobile phone insurance providers

Good practice guide for mobile phone insurance providers

The ABI has published a good practice guide for the sale of mobile phone insurance providers. When the FCA conducted the thematic review of mobile phone insurance, it found a gap between what some firms have led consum... Read more...
December Regulatory Round Up

December Regulatory Round Up

The FCA has published the latest edition of its regulatory round up which highlights the soon to be published claims handling thematic review. Firms involved in the review will receive feedback during February, with th... Read more...
FCA Website Survey – voice your opinion

FCA Website Survey – voice your opinion

The FCA is conducting an anonymous survey of its website, giving users an opportunity to feedback on how ‘user friendly’ the site is. This is your opportunity to influence the future development of the site... Read more...
Add-ons remain an opportunity for compliant brokers [Video]

Add-ons remain an opportunity for compliant brokers [Video]

Given the recent spotlight on add-ons in the wake of the Swinton fine, Jerry White, UKGI Managing Director, reassures brokers that add-ons continue to be of value for both brokers and their clients.   Tran... Read more...
FCA fines Lloyds Banking Group firms over £28m for serious sales incentive failings

FCA fines Lloyds Banking Group firms over £28m for serious sales incentive failings

The FCA has fined Lloyds TSB Bank plc and Bank of Scotland plc, both part of Lloyds Banking Group (LBG), £28,038,800 for serious failings in their controls over sales incentive schemes. This is the largest ever f... Read more...
FCA outlines rebate for consumer credit licence holders

FCA outlines rebate for consumer credit licence holders

The FCA has published a new webpage on the rebate scheme for consumer credit licence holders. More details are still to be published but in the interim information has been provided on the following: Eligibility u... Read more...
FCA updates plans to enforce the consumer credit regime

FCA updates plans to enforce the consumer credit regime

The FCA has published an update to its consumer credit pages outlining how it intends to enforce its regime. The page highlights that most of the new rules will come into effect from 1 April 2014 however, it identifies... Read more...
The FCA launches review of price comparison sites

The FCA launches review of price comparison sites

In its 2013 Conduct Risk Outlook and 2013/2014 Business Plan, the FCA set out that it would be reviewing Price comparison websites (PCWs). In announcing the review, the FCA has also highlighted two specific risks:... Read more...
Trust and confidence − ensuring firms’ ethics are built around their customers

Trust and confidence − ensuring firms’ ethics are built around their customers

In a speech given at the Insurance Institute of London, Clive Adamson, FCA Director of Supervision, emphasised the need for firms’ ethics to be built around their customers and reflected a number of key areas of... Read more...
FCA will push for brokers to have ‘house in order’, UKGI predicts

FCA will push for brokers to have ‘house in order’, UKGI predicts

Compliance consultancy UKGI predicts 2014 will see the conduct regulator pressuring the broking community to “put its house in order” before insisting on fresh regulations. Firms will have to have a plan fo... Read more...
FCA intervened in over 200 financial promotions in past year

FCA intervened in over 200 financial promotions in past year

A freedom of information request, reported on www.mortgagestrategy.co.uk, has revealed that the Regulator made firms amend or withdraw 204 financial promotions in the 12 months to 30 June, highlighting that firms are s... Read more...
Regulatory fees and levies policy proposals for 2014/15

Regulation round-up: Regulatory fees and levies - policy proposals for 2014/15

Welcome to UKGI's latest regulation round-up, summarising the latest compliance news in general insurance. This issue includes: Regulatory fees and levies: policy proposals for 2014/15 FCA's regulatory... Read more...
Martin Wheatley: the industry is becoming fairer

October 30: UKGI regulation round-up

Welcome to UKGI's latest regulation round-up. This round-up includes: Martin Wheatley: the industry needs to continue focusing on fairness Q2 complaints to FOS up 39% on last year Martin Wheatley: The i... Read more...
UKGI regulation round-up

22 October: UKGI regulation round-up

Welcome to UKGI's latest regulation round-up. This round-up includes: FCA publishes data on complaints and redress for the first half of 2013 FCA to publish information about enforcement warning notices... Read more...

UKGI Autumn workshops: Regulation is changing, don’t get left behind

The insurance industry is already feeling the effects of a new Regulator. With the current pace of change it’s more important than ever that you keep up-to-date with the changes and what they mean for your busine... Read more...
UKGI regulation round-up

Issue 1: UKGI regulation round-up

Welcome to our first UKGI regulation round-up. These regular updates will keep you up-to-date with the latest developments on topical regulatory issues affecting brokers. This round-up includes: FCA policy develop... Read more...
Swinton fine could be just the beginning of regulator’s add-on campaign

Swinton fine could be just the beginning of regulator’s add-on campaign

The recent fine issued to Swinton by the Financial Conduct Authority for the miss-selling of add-ons should act as a warning to all brokers. The £7.4m fine was issued for flaws in the sales process of add-on prod... Read more...
Business Risk Awareness Workshops (BRAW)

Stage 1: Business Risk Awareness Workshops (BRAW)

Following the release of our 5 minute guide to BRAW and the FCA Business Risk Awareness programme, here's a summary of stage one: BRAW. Stage 1: Business Risk Awareness Workshops (BRAW) The focus of the Business... Read more...
Busines Risk Awareness Workshops (BRAW) rollout

FCA business risk awareness programme: the rollout

The FCA's Business Risk Awareness programme started 18 months ago in the North West with Business Risk Awareness Workshops (BRAW).  Following the release of our 5 minute guide to BRAW and the FCA Business Risk... Read more...

UKGI's big 5 guide: Issue 3 - Financial Incentives

If you haven't yet downloaded your copy of 5 big compliance issues you can't ignore in 2013 then download your copy today.  Here's the third issue in the series: Financial Incentives A key issue for... Read more...
Changes coming

UKGI's big 5 guide: Issue 1 - The Changing face of regulation

If you haven't yet downloaded your copy of 5 big compliance issues you can't ignore in 2013 then download your copy today. Here's a taster of the first big issue: Issue 1 - the changing face of regulation... Read more...

Brokers fear FCA is little more than re-branding exercise according to survey

Three quarters of brokers feel that the FCA is simply a re-branding exercise rather than a fundamental change to regulation according to a UKGI poll conducted at the 2013 BIBA Conference. When asked if they agreed with t... Read more...

The FCA to regulate Consumer Credit

The Government announced last month that it is transferring responsibility for regulating consumer credit from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) by 1 April 2014. To coincide with... Read more...

Welcome to the FCA and PRA!

As we return to work after the Easter break, we do so under the auspices of the PRA and FCA, who have now succeeded the FSA. The FSA issued a variety of papers last week, finalising some of the detail required before l... Read more...

The FCA – The journey continues

It’s just over a week to ‘legal cutover’ and the FCA and PRA will shortly be in power! We are still expecting a flurry of communications and policy statements over the coming days as the FSA confirm t... Read more...

A brief history of... the FCA’s papers

While it’s not quite ‘quantum theory’, the total of the FCA’s papers since October may be quite heavy going for some, and would certainly make quite a tome in their own right. At UKGI, we though... Read more...

Journey to the FCA

In October 2012 an FSA Approach document was published to set out how the FCA will approach their regulatory objectives, how they intend to achieve a fair deal in financial services for consumers and where they are on... Read more...

CII CPD accredited

Demonstrates the quality of the training provider’s course and confirms that it meets CII member CPD scheme requirements. Read more...