Context
The ABI has published a ‘guest blog’ by Joseph Thomson, Technical Specialist at the FCA. Thomson explains that the ABI is working with FCA and other trade associations including BIBA on how they can ensure that expectations for everyone involved in the distribution chain are as clear and simple as possible.
The blog seeks to address the question ‘what does the regulator actually want?’, aiming to offer a clear, regulator led steer on how firms should approach fair value in practice.
Key points to note and next actions
In addressing “Fair value – testing outcomes, not process”, Thomson reiterates the FCA’s (and his) view that “customers must be confident they’re getting fair value” and that this will lead to “better outcomes for people”, That being the case, the FCA is mainly interested in those outcomes, not process. Thomson sets out that a good product approval and fair value assessment will ensure that:
- Products meet the needs of customers.
- Prices are a fair reflection of the benefits and services provided.
- Where the first two are not being met, actions are identified and taken.
The FCA recently ran a webinar where it covered some of the most common myths and misconceptions it has heard in relation to fair value and value assessments.
The blog also briefly covers the FCA’s ‘simplifying the insurance rules’ publications.