FCA has published its supervisory strategy letter to personal and commercial lines insurers. The letter is dated 28 April, but only just published.
The letter updated FCA’s previous communication of January 2020. While praising firms’ general response to regulatory change and the pandemic, the letter highlights FCA’s views of key drivers of harm as:
- poor pricing practices posing significant risk of harm and poor outcomes for consumers
- consumers purchasing product that are not fair value
- consumers experiencing poor service through ineffective oversight of the value chain
- BI claims not being paid out in a timely manner or in accordance with the test case judgment and
- operational resilience not preventing loss or misuse of consumer data or consumers losing access to services
The letter was written before FCA published its final rules on value pricing and renewals, and highlights firms’ need to prepare to comply with these. It also highlights recent reviews and letters, setting out its expectations and other upcoming regulatory changes, such as the need to implement changes to meet the new operational resilience requirements by March 2022.