The FCA has issued a statement on the ongoing cladding issue;
In letters to the chief executives of insurance firms and brokers, we have today outlined work we are carrying out in the insurance market for multiple-occupancy residential buildings. We have also responded to a letter from the Department for Levelling Up, Housing and Communities (DLUHC) on this issue.
Although insurance premiums are just one aspect of the rising costs faced by residential leaseholders in the wake of the Grenfell tragedy, we want to ensure products provide fair value and premiums fairly and accurately reflect risk.
The letters outline the work which includes examining firms’ approaches to pricing for multi-occupancy buildings and whether elements unrelated to risk such as commissions are driving up costs. The letters also remind firms of their obligations under our rules, including to consider the costs borne by leaseholders when determining whether a product is fair value.
We are asking firms to consider what actions they can take to help leaseholders, whether individually or by identifying collective solutions as an industry.
This work will be done with the Competition and Markets Authority where appropriate.
James Dalton, ABI Director of General Insurance Policy, says:
“Insurers recognise and sympathise with the challenges leaseholders are facing in terms of the increased cost of buildings insurance and have been working with the Government and FCA to identify options to assist leaseholders until the necessary remediation work has been completed. The cost of buildings insurance reflects the significant fire risks associated with many multiple-occupancy residential buildings, which go beyond cladding under a building control system that has been found to be “not fit for purpose”. We welcome this request to the FCA in the interest of helping resolve the issue for those affected and, alongside our members, will do all we can to assist.”