What’s on the radar?
The CII takes a look at what’s new on the policy and public affairs front this month
FCA PUBLISHES GI DISTRIBUTION CHAIN REPORT
The UK Financial Conduct Authority (FCA) has identified “significant potential for harm and poor outcomes” for customers, arising from the product development and distribution approaches in some sectors of the general insurance (GI) market, following the publication of a thematic review.
The Insurance Distribution Directive enshrines the principle to act “honestly, fairly and professionally” in accordance with the best interests of the customer, while the Senior Manager and Certification Regime is designed to ensure that senior managers are accountable for the actions of their firms.
The CII has been clear in its response that rather than focusing on the ‘potential’ for harm and the FCA’s promise of further action where necessary, the value that the regulator is placing on the ‘spirit’ of good outcomes for consumers rather than rigid compliance should serve as welcome news for the vast majority of firms that deliver such outcomes for consumers every day.
The CII’s response:
Delivering good outcomes is often a tough challenge – research for the CII Public Trust Index shows that there are nine different factors that need to be satisfied to gain public trust (see bit.ly/2JdVo5y).
We will be working to give the support that professionals need to deliver on all these nine factors – by providing high-quality insights into consumer attitudes like the Public Trust Index, good practice guidance on new risks and regulation, and, most importantly, building communities of likeminded professionals who can share good practice with each other, such as the Society of Insurance Brokers and the Society of Claims Professionals.
THE FCA DIRECTORY
The FCA has published the long-awaited final rules on the proposed new Financial Services Directory. Following the FCA’s consultation during the summer/autumn of 2018, the emphatic industry view is that a directory of those working within financial services would be a positive move towards increased accountability and consumer protection. The FCA has been at pains to highlight that the FS Directory will promote transparency by requiring firms to disclose a relatively granular level of detail on their staff (including membership of relevant accredited bodies such as the CII), and by ensuring that the directory is rolled out using user-friendly, online functionality.
The Policy Statement can be accessed at: bit.ly/2HchN53
FCA CONFIRMS INCREASE IN FINANCIAL OMBUDSMAN SERVICE AWARD LIMIT
The Financial Ombudsman Service (FOS) is now able to require financial services firms to pay significantly more compensation to consumers and businesses. The current £150,000 limit will increase to £350,000 for complaints about actions by firms on or after 1 April 2019; and for complaints about actions before 1 April that have been referred to the FOS after that date, the limit will rise to £160,000.
The new award limit comes into force at the same time as the extension of the service to larger SMEs. These are firms with fewer than 50 employees, with an annual turnover of less than £6.5m and with an annual balance sheet total of less than £5m. An additional 210,000 SMEs will now be eligible to complain to the FOS.
Read the full statement at: bit.ly/2Tzg4gG
Household insurance study published
The FCA has announced new dates and venues for the following ‘live and local’ events across the UK, which are aimed specifically at general insurance firms.
Sam Woods explores the Prudential Regulation Authority’s (PRA) role in maintaining “a resilient insurance sector which does not pass risks back to policyholders when they crystallise”.