Matthew Connell highlights developments around consumer vulnerability and FCA pricing rules
Consumer Vulnerability
The Insurance and Financial Services All Party Parliamentary group held a roundtable on consumer vulnerability in June, focussing on the greater need for resilience post-Covid. The group heard about opportunities for financial services to contribute to the government’s strategy of ‘social prescribing’, in which building financial resilience becomes part of the toolkit of public-sector services such as health.
It also highlighted the achievements of contents insurance for social housing, which gives cover – including accidental damage cover – to tenants of social housing landlords for minimal premiums.
Competition Inquiry into Multiple-Occupancy Housing
In contrast to the story on social housing, the government wrote to the Financial Conduct Authority (FCA) on its interim findings on the Review of Buildings Insurance for Multiple Occupancy Buildings. Michael Gove, the UK secretary of state for levelling up, housing and communities picked up on a ‘lack of competition between insurers on multiple occupancy buildings’ saying: “I would like to understand what can be done to encourage new entrants into this market.” He also said he would like to see how “all actors in the insurance marketplace have contributed to high premiums for leaseholders” such as participants who are not covered by FCA regulation, including freeholders and managing agents.
FCA Pricing Rules
The FCA pricing rules requiring equal treatment of new and existing customers came into placed in January, but there is still some debate over whether the spirit as well as the letter of the rules are being followed. For example, there is scope for prices to be different if the channel used to renew a policy is not the same as that used to buy it originally, for example, if a product was originally bought through a comparison website but renewed direct through a call centre. The FCA has said: “We are using a range of tools to assess firms’ compliance, including thorough analysis of reporting data from firms, as well as consumer and market intelligence.”
FCA Strike
FCA employees took part in a second wave of strike action in June over pay. Sharon Graham, Unite general secretary, said: “The FCA can restore confidence if it chooses to. It is very simple: they can work with Unite to improve pay, terms and conditions, and accept the desire of this workforce to be represented by our union, or they can face ongoing strike action.”
An FCA spokesperson stated: “We said that the statutory process for recognition conducted through the independent Central Arbitration Committee (CAC) was the best way of assessing the views of all colleagues on collective bargaining.
“Following the CAC’s decision, we want to have an open conversation with all our colleagues about how their voice is represented – listening and responding to the diverse range of views and opinions we are proud of at the FCA.”
Matthew Connell is director of policy and public affairs of the CII
