FCA sets out potential remedies on general insurance pricing
The FCA has published an interim report of its market study into the pricing of home and motor insurance, setting out concerns about how pricing in these markets leads to consumers who do not switch or negotiate with their provider paying high prices for their insurance. While the FCA continues its work to ensure firms improve the oversight of their pricing practices and deliver the changes required following other recent policy changes, it has set out a number of new proposals to improve transparency and stop practices that could discourage switching.
Motor finance reforms on the way
The FCA has announced plans to ban the way in which some car retailers and other brokers in the motor finance sector receive commission. Currently, some motor finance brokers receive commission which is linked to the interest rate that customers pay. The regulator wants to remove the financial incentive for brokers to increase the interest rate that a customer pays and give lenders more control over the prices customers pay for their motor finance. The FCA is also proposing to make changes to the way in which customers are told about the commission they are paying to ensure that they receive more relevant information. These changes, which are under consultation, could apply to other types of credit brokers and not just those selling motor finance.
Building cyber resilience
The FCA says that supporting the drive for cyber resilience in financial services continues to be one of its top priorities. Firms need to be resilient to cyber-attacks. The FCA is highlighting some of its publications to help when considering cyber arrangements, starting with an infographic on cyber resilience, which gives tips on the foundations of good cyber security. It breaks down good practice into several key areas, giving concrete actions to focus on.
Complaints data for first half of 2019
The FCA has published the complaints figures for regulated firms for the first half of 2019. The data showed an increase in complaints from 3.91m in the second half (H2) of 2018 to 4.29m for the first half (H1) of 2019. The increase in complaints was mainly driven by a 34% increase in the volume of PPI complaints received in the run-up to the deadline, from 1.58m to 2.12m.
However there was a 6% drop in the number of non-PPI complaints – the lowest number firms had received since new reporting rules came into effect in 2016. Excluding PPI, the most complained about products remained current accounts (14% of reported complaints), credit cards (8%) and motor and transport insurance (6%).
New platform to replace Gabriel
The FCA is working towards an easy-to-use system enabling firms to submit data in a way that is efficient and through a system and approach that can be adapted to changing needs. Early changes to the Gabriel platform will be technology focused, so initially there will be no change to the way firms provide data, but more significant improvements will be made in the future. Following a survey of users, the FCA has identified 3 key areas for improvement; accessing Gabriel, viewing Gabriel reporting schedule and submitting data.
Guidance consultation on the fair treatment of vulnerable customers
The FCA is consulting on guidance regarding the fair treatment of vulnerable customers. This is to provide clarity for firms involved in the supply of products or services to retail customers who are actually, or are potentially, vulnerable. The proposed new guidance sets out the FCA’s view of what the FCA Principles require of firms to ensure that vulnerable consumers are treated fairly consistently.