FCA has published its findings from its multi-firm review of 18 insurers and 48 intermediaries that assessed how firms satisfied themselves that they do not apply a loyalty penalty to motor and home insurance customers. Overall, it said firms had taken appropriate action to comply with the rules that took effect on 1 January 2022. It found that larger firms were more likely than smaller ones to have kept good records, and that few firms actually provided evidence as to how they had satisfied themselves that they were complying on an ongoing basis with FCA’s rules, while asserting that they did not differentiate between new and renewing customers.
FCA had asked firms for their records kept in compliance with the rules in ICOBS 6B, and also relevant policies and procedures, any potentially reportable but not reported breaches and pricing incentives and also asked firms to confirm whether their attestations had included consideration of delegated authority business.
Other key findings included:
- in most cases, the person providing the attestation was sufficiently senior – the SMF1, 3 or 23;
- only 11 of the firms provided records that fully met FCA’s expectations;
- only one third of the firms adequately showed how they ensured ongoing compliance – FCA noted a lack of control frameworks;
- generally firms were using pricing incentives appropriately; and
- no firms had incorrectly decided not to report a potential breach.