FCA Wants Insurance Brands to Ease Cost of Living Stress

The latest update from the FCA;

The FCA is proposing to update guidance, introduced during the Covid-19 pandemic, to support insurance customers in financial difficulty. As part of the FCA’s ongoing work to help protect customers during the current 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.

For example, 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 customers’ policies.

Sheldon Mills, Executive Director, Consumers and Competition at the FCA, said:

“Access to insurance is vital, providing peace of mind and security in case things go wrong.

“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, so customers can make informed decisions.

The FCA’s actions are part of its Strategy to deliver good outcomes for consumers in the UK’s world leading financial services industry, which has widely recognised and respected high standards.