Context
The FCA has issued a Portfolio Letter to Lloyd’s and London Market insurance intermediaries (including Managing General Agents), in which the FCA’s headline expectation is for these firms to consider the extent of the identified risks in their businesses and to act where they identify harm.
Key points to note
The letter sets out the FCA’s view of this Portfolio, and identifies the key areas of harm identified for these firms as:
- Product suitability and price transparency;
- Uncertainty of insurance cover because of ambiguous contract terms;
- Culture (including diversity and inclusion and non-financial misconduct); and
- Financial and operational resilience.
Under this heading, the FCA reminds firms of the importance of maintaining adequate client money arrangements.
In relation to next steps for firms, the FCA expects firms to keep up to date with regulatory developments generally and with the areas covered in this letter. In recognising that there may be occasions in which firms faces urgent issues of strategic importance, the letter invites firms in such circumstances to contact the Head of Department responsible for the LLMI Portfolio, Charlotte Cross at Charlotte.Cross@fca.org.uk.
Next actions
Firms should document an internal response to each section of the FCA’s letter, to be able to explain the work undertaken in response to this letter should the FCA ask for such evidence. Please contact us if you require any assistance in assessing the issues highlighted in the letter.