FCA publishes insurance guidance on supporting customers in financial difficulty

Following its January consultation, FCA has published finalised insurance guidance on supporting customers in financial difficulty.

In November 2020, FCA published guidance for insurance and premium finance firms to support customers in financial difficulty due to the COVID-19 pandemic. The consultation sought to extend this guidance to all customers in financial difficulty, not just those detrimentally impacted due to the pandemic. The guidance builds on FCA’s customers’ best interest and Consumer Duty rules.

In particular, FCA suggests that firms provide appropriate support through signposting, and tailor measures to the individual circumstances of consumers. The finalised guidance also includes a provision setting out that firms should consider whether, in certain circumstances, it would be appropriate to refer the customer to another firm in the distribution chain who is in a better position to support the customer.

The guidance will come into effect on 31 July 2023.

Laura Wiles