The FCA has issued a Dear CEO letter to insurance intermediaries reminding firms that its enhanced product governance rules came into force on 1st October 2021, and that they apply to manufacturers and distributors of almost all general insurance or pure protection products.
Having found that a ‘material’ number of general insurance distributors needed to be asked to clarify whether they were indeed a manufacturer or distributor of general insurance products (having initially indicated in the FCA’s readiness survey that they were neither) the FCA is concerned:
The FCA therefore expects firms to carefully consider the content of the letter and, if not already undertaken:
The FCA has also said that it was working on the final wording of the attestation form that price-setting firms will be required to submit. The same form will also allow firms to make the necessary notification on cash or cash-equivalent incentives including commission rebating.
As the information for the first attestation is different to that of the second and subsequent annual attestations (no incentives / rebating notification on the first form?), the FCA will use the Qualtrics survey tool for the first attestation only, which it expects to issue to all general insurance firms and credit premium finance providers in early January 2022.
Insurance distributors need to carefully review the letter and carry out the actions that the FCA requires, as set out in the letter.