The CII takes a look at what's new on the policy and public affairs front this month
Amid the current coronavirus crisis, the Financial Conduct Authority (FCA) has launched its annual 2020/21 business plan, with its response to the Covid-19 situation heavily featured.For the short to medium term, the FCA sets out how it will be working to ensure: that markets function well; that the most vulnerable are protected; that the impact of firm failure is minimised; that it tackles scams; and that consumers and small firms are treated fairly.
Some of the measures and guidance the FCA has implemented are:
- Setting out clear expectations for general insurance providers -- including home, travel and motor insurance.
- Providing information for consumers to help them understand what to expect from their insurers during this time.
- Providing information on how the government's rules on key workers should be applied to financial services firms.
- Highlighting to consumers the increased risk of scammers trying to exploit the uncertainty created by the current situation.
- Reviewing FCA workplans to delay activity that is not critical to protecting consumers and market integrity in the short term, allowing firms to focus on supporting their customers during this time.
The CII has been engaging with the FCA and other regulators and government bodies since the start of this crisis, to ensure our members are supported in delivering the best possible outcomes for their customers and we are pleased with how understanding they have all been during such a difficult situation.
As expected, the FCA's efforts and energies are directed at the current state of play, but in its business plan it has outlined what it will be looking at on a longer-term basis.
One such area is a way in which consumers are offered fair-value products. The FCA's view is that in a digital age, as use of consumer data and behaviour through digital channels increases, the risk that consumers are not treated fairly in the pricing and other terms they receive increases too.
With this in mind, the FCA has committed to reforming its own internal processes; reviewing how it uses information it receives; and investing in its capabilities, systems and technology. All this with the addendum that it will look for the best value for money possible within services -- something firms will hope to see alongside the FCA's announcement of fee increases across the board.
At the heart of this announcement sits the commitment to change the regulatory framework and not just in response to a post-Brexit world. As part of the regulator's determination to shift focus onto outcomes, it wants to change the fundamental priorities of its regulatory interventions to ones aimed at principles. This, the FCA says, is to empower consumers to make good decisions, while safeguarding their financial wellbeing.
Outcome-based regulation is a far more effective means of regulating a modern market and a shift to this approach (trialled for several years now) is one we can certainly welcome.
The CII's commitment throughout all of this, and beyond, will be to continue to engage with and inform our members, while working with regulators and government to ensure insurance professionals can continue to do all they can to focus on the tasks at hand and ensure that consumer interest is protected.
Shayne Halfpenny-Ray is policy and public affairs adviser of the CII