Some thoughts from Arabella Ramage, Legal and Regulatory Director, Lloyd’s Market Association:
The Lloyd’s Market Association (LMA) welcomes the willingness that the Financial Conduct Authority (FCA) has shown to adopting a differentiated approach to the wholesale London insurance market. The LMA has been working closely with the FCA, holding joint roundtables before the launch of last year’s discussion paper to help shape the initial proposals. This consultation has been the result of long-term lobbying of the FCA and successive governments to consider competitiveness and regulatory proportionality.
The FCA’s proposal of aligning the scope of Consumer Duty to the Financial Ombudsman eligibility is eminently sensible and strongly aligns with the LMA’s viewpoint. We would, however, encourage the FCA to make the definition of consumer much simpler and have proposed how we think this could be achieved.
We believe further improvements could be made to the wider proposals without increasing the risk to consumers, as reflected in our substantive response. Together with our members, we have worked through the individual proposed rules to test their effectiveness, and hope that this constructive approach will make for a better outcome for the Lloyd’s market and its customers.
We were disappointed that the international scope of rules was not part of the formal consultation, but only a discussion point. It was therefore encouraging to hear Nikhil Rathi’s pledge during his CityUK speech last week to be clearer about jurisdictions where the Consumer Duty applies, thus making it easier for the Lloyd’s market to serve international customers. We therefore hope that this can be turned into formal policy as soon as possible.
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