What’s on the Radar?
The CII takes a look at what’s new on the policy and public affairs front this month
CITIZENS ADVICE ‘SUPER-COMPLAINT’ TO THE CMA ABOUT THE ‘LOYALTY PENALTY’
Citizens Advice has submitted a super-complaint to the Competition and Markets Authority (CMA), calling on it to identify remedies and recommendations to put an end to the ‘penalty’ paid by loyal and disengaged consumers. The super-complaint covers five ‘essential’ markets where Citizens Advice has concerns about such penalties, one of which is household insurance.
The CMA will now investigate concerns raised that people who stay with their provider – often on default or rollover contracts – can end up paying significantly more than new customers. Citizens Advice has also asked the CMA to focus on vulnerable customers, who it fears can be hardest hit.
The CII’s own Public Trust Index – published earlier this year – identified rewarding loyalty as the key opportunity for the insurance profession to build public trust, and where our research found there to be the biggest gap between consumers’ expectations and insurer performance. We found that it is ‘dual pricing’ – charging excessive differences between new customer premium prices and those at renewal for longstanding customers – which has been most corrosive of trust in our profession.
Alongside the CMA’s investigation, the UK Financial Conduct Authority (FCA) has also announced a market study looking at how general insurance firms charge their customers for home and motor insurance. The terms of reference for this study are yet to be announced.
The super-complaint can be viewed here: bit.ly/2A3hPY7
WORK CARRIED OUT BY THE FCA ON ACCESS TO INSURANCE
The Treasury Select Committee has published a letter by Andrew Bailey to chair Nicky Morgan MP on the work carried out by the FCA on access to insurance.
The letter gives a useful overview of the FCA’s plans when considering vulnerable customers. In particular, Mr Bailey makes reference to ‘directing’ the industry to implement a new signposting service for those with pre-existing medical conditions to help them find specialist travel insurance providers, which they would like to see operating by spring 2019. Although this will be piloted initially in the travel insurance market, the regulator will keep progress under review before deciding whether it could include other types of general insurance.
The FCA plans to consult on guidance for firms on the identification and treatment of vulnerable consumers early next year.
The letter can be viewed here: bit.ly/2pM3b1B
ETHNICITY PAY REPORTING
The Department for Business, Energy & Industrial Strategy (BEIS) has launched a consultation on ethnicity pay reporting by employers.
It sets out options and asks questions on what ethnicity pay information should be reported by employers to allow for meaningful action, who should be expected to report, and next steps. The objective of the consultation is to enable government and employers to move forward in a consistent and transparent way. Consultation responses will inform future government policy.
The consultation closes on 11 January 2019. Further information can be found at: bit.ly/2Ce4Swh
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.
The UK’s Prudential Regulation Authority has published a package of final rules, guidance and proposals on accountability
The UK Financial Conduct Authority (FCA) has published the first of two consultation papers on implementing the Insurance Distribution Directive (IDD).