Home / International / UK insurers gain extension on pricing reforms
29 March 2021
The Financial Conduct Authority (FCA) will give insurers more time to respond to reforms aimed at cracking down on pricing practices that disadvantage loyal customers.
The regulator sought comments on its proposals by January 25 and had said firms would be given four months from the release of a final policy paper to make the changes.
Following feedback, the FCA has amended the timetable to give until the end of September for systems and control rules and product governance rules and until the end of the year for pricing, auto-renewal and reporting requirements.
“In reaching this decision, we have sought to balance ensuring firms have sufficient time to put the changes into effect and acting quickly to address consumer harm,” the FCA says.
“We will consider taking action against firms where there is evidence that they have not taken sufficient steps to implement the rules by the implementation date.”
FCA has not yet reached a final decision on the details of rules it might introduce and says it will publish its policy statement at the end of May.
More than 100 responses were received on the consultation, with firms advising that actions proposed would require significant operational and business-wide changes, involving the testing of new pricing models and re-coding IT systems.
Consumer Intelligence CEO Ian Hughes says the extra time “isn’t much of an extension” and applies to only some of the measures.
“Firms will have seven months to address final dual pricing rules but the work on fair value should not be underestimated,” he said.
“It includes all parts of the distribution chain including insurers, brokers, price comparison websites, add-on, premium finance and all personal lines products.”