Regulator consults on protections for insurance customers struggling financially
11 January 2023, 10:54
The FCA is proposing to update guidance introduced during the pandemic.
Guidance introduced during the coronavirus pandemic to support insurance customers in financial difficulty will be updated under proposals by the City regulator.
The Financial Conduct Authority (FCA) said as part of work to help protect customers during the cost-of-living squeeze, this will provide clarity to firms about how they should support all struggling customers, not just those facing problems due to the pandemic.
Under the guidance, insurers should consider whether a different product is more suitable for customers facing financial difficulties and whether they should waive cancellation and other fees associated with adjusting the policies.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “Access to insurance is vital, providing peace of mind and security in case things go wrong.
We want to protect vulnerable #insurance customers by letting firms know what they should do to help those in financial difficulties. https://t.co/ongnyOjKUy
— Financial Conduct Authority (@TheFCA) January 11, 2023
“By extending our guidance we are helping consumers keep that safety net, and ensure they’re properly supported when they claim, even as the cost of living increases.”
The FCA has already urged insurers and brokers to treat their customers fairly by not undervaluing insured items and charging unnecessary add-ons and unfair penalties, such as increased interest for those facing financial difficulty.
FCA rules also mean that firms must make sure the information they provide customers is fair, clear and not misleading.
A consultation on the proposed changes will end on March 11.
