What’s on the radar?
The CII takes a look at what’s new on the policy and public affairs front this month
FCA CONSULTS ON REGULATION OF CMCS
As the recently passed Financial Guidance and Claims Act 2018 will transfer responsibility for claims management regulation to the UK Financial Conduct Authority (FCA) on 1 April 2019, the FCA has now published a consultation paper containing draft rules for the regulation of claims management companies (CMCs).
The FCA proposes to create the Claims Management: Conduct of Business Sourcebook (CMCOB), containing rules that apply specifically to CMCs. These aim to hold CMCs as trusted providers of high quality, good value services that help customers pursue legitimate claims for redress and benefit the public interest. The proposals include requiring CMCs to:
- Provide a potential customer with a short summary document containing important terms before any contract is agreed;
- Highlight any free alternatives to using the CMC;
- Record and keep all calls with customers for at least 12 months;
- Segregate client money and hold it on trust.The deadline for comments is 3 August 2018. For more information visit: bit.ly/2taaDpo
PRA RELEASES ‘DEAR CEO’ LETTER ON MARKET CONDITIONS FACING SPECIALIST GENERAL INSURERS
The Prudential Regulation Authority (PRA) has released a ‘Dear CEO’ letter for the attention of insurance firms, observing that there are signs that some of the longer-term prudential risks associated with a soft market are now feeding through into firms’ report results.
The PRA is of the view that boards may now benefit from reassessing whether their business models remain sustainable and whether controls over underwriting and reserving in specialist lines are adequate. Firms that continue to exhibit some of the weaknesses outlined in the letter are more likely to find themselves under increasing supervisory s crutiny.
The PRA invites summaries of responses on the issues raised from firms by 27 July 2018.To view a copy of the letter see: bit.ly/2lmPIex
FCA FEEDBACK STATEMENT ON CONSUMER ACCESS TO INSURANCE
Following an earlier call for input to decide how best to address concerns about people with pre-existing medical conditions obtaining affordable travel insurance, the FCA has published a feedback statement setting out how it will work with key industry stakeholders to create a new service which will redirect such customers to specialist providers.
Themes emerging from the responses include:
a lack of quality information on alternative options available to consumers after they had received a high quote or had been refused cover;
a general lack of understanding among consumers around insurance terms; and
the lack of transparency around pricing and the risk factors which drive quotes.
The responses will be used to influence the FCA’s wider work on insurance pricing practices announced in the business plan for 2018/19.The statement can be viewed at: bit.ly/2tJ5rYY
BIBA/ABI ISSUE GUIDING PRINCIPLES ON DUEL PRICING
The British Insurance Broker’s Association (BIBA) and the Association of British Insurers (ABI) have teamed-up to issue a joint Guiding Principles and Action Points for General Insurance Pricing document, which seeks a commitment from firms to avoid excessive differences between new and renewal premiums. This is intended to apply to personal lines products with contract terms of 10 months or longer, except pet and private health insurance. Formore information visit: bit.ly/2jGcAVx
The Financial Conduct Authority (FCA) is consulting on proposed amendments to rules on the purchase of products that provide consumers with guaranteed income in retirement (pension annuities).
Measures to change the way compensation payouts are calculated have been unveiled by Lord Chancellor David Lidington.
The UK Financial Conduct Authority (FCA) has published the first of two consultation papers on implementing the Insurance Distribution Directive (IDD).