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FCA provides confirmation of implementation dates for general insurance pricing practices rules

Mar 25, 2021 | Consultation Paper, FCA

Link(s): https://www.fca.org.uk/news/statements/implementation-period-any-rules-arising-cp20-19

Context

The FCA has reacted to feedback from over 100 responses to the consultation on general insurance pricing practices (CP20/19) by proposing to amend the implementation timetable in an attempt to balance ensuring firms have sufficient time to put the changes into effect with acting quickly to address consumer harm.

Key points to note

  • Feedback from respondents indicated that the proposed four-month period to implement any rules that the FCA might make was insufficient, given the significant operational and development changes particularly with the current pressures of the Coronavirus pandemic. 
  • Following this feedback, the FCA has proposed to amend the timetable for implementation as follows:
    • Systems and Controls rules – end of September 2021
    • Product Governance rules – end of September 2021
    • Pricing, auto renewal and reporting requirements – end of December 2021
  • The intention is to balance the need for firms to have sufficient time to put the changes into effect, while acting quickly to address consumer harm.
  • A final decision has not yet been reached on the details of any rules, but it is hoped that this announcement will enable firms to plan their change programmes effectively.
  • The FCA will publish the policy statement, and any rules at the end of May. The implementation period will start from this point.
  • The FCA will expect firms to implement any rules on or before the proposed deadlines and intend to contact firms to check that the implementation of any final rules is on track.
  • The FCA found there was evidence of consumer harm and will consider taking action where there is evidence that firms have not taken sufficient steps to implement the rules by the implementation date. This includes any steps to remedy harm or financial loss that that has already arisen. The FCA has stated that it does not wish to see consumer harm continue into 2022. 
  • It is worth noting that new pricing rules would apply to renewal notices sent after the rules take effect (rather than to policies renewing after the rules take effect).

Next actions

Firms should ensure that they understand the requirements, identify the impact of the changes on existing processes and develop an implementation plan to ensure that changes can by made within the timescales allowed.