The Financial Conduct Authority (“FCA”) is proposing to update its guidance on how firms should support insurance customers facing financial difficulty.
Current guidance which was introduced as a response to the Covid-19 pandemic, aimed to protect customers and will be updated further to support customers during the current cost of living crisis. The proposal aims to update and provide clarity for firms about how they should support all struggling customers, not just those facing problems due to the pandemic.
Proposals under the new guidance will push insurers to consider whether a different product is more suitable for customers facing financial difficulties and whether firms should waive cancellation and other fees associated with adjusting customers’ policies.
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.
The FCA’s Principles for Businesses, Treating Customers Fairly and Consumer Duty rules mean that firms must make sure the information they provide customers is fair, clear and not misleading and ensure that customers can make informed decisions.
The FCA’s actions are part of its ongoing strategy to deliver good outcomes for consumers.
