FCA has written to Michael Gove MP, Secretary of State for the Department for Levelling Up, Housing and Communities, to provide an update on the FCA’s review of the annual price increases for multi-occupancy buildings insurance and the marked restriction in insurance coverage available for multi-occupancy buildings.
FCA confirmed that:
- it is gathering data and engaging with the industry to understand their approach to pricing;
- insurers may be shying away from bidding for new business of multi-occupancy buildings or charging high premiums to insure them due to perceived issues with building safety and quality;
- factors such as high commission paid to brokers and property managers, and a lack of competitive pressure on prices could be leading to harm; and
- it has begun work developing initial options for ways to address any harms identified. In particular, FCA is considering whether it could use its powers to improve information provided to leaseholders about their insurance and commissions paid to brokers should be limited. FCA is also considering the scope of its powers and whether some of the identified harms would be better addressed through actions by others.
FCA confirmed that it is working to produce its final report within the six month period requested by the Department for Levelling Up, Housing and Communities.