Context
The FSCP has published its response to the FCA in about the FCA Consultation Paper CP26/22: Simplifying the insurance rules. Broadly, the Panel supports the FCA’s ambition of reducing consumer confusion and information overload by removing mandatory disclosures that do not help consumers choose policies whilst enabling and supporting the improvement of consumer confidence, understanding and capability.
Key points to note and next actions
The Panel recognises:
- most retail general insurance products are now purchased online, and supports greater personalisation of digital communications; and
- removing the overlapping definitions of advice in the retail general insurance market and clarifying the boundary between a true personal recommendation and a simple non-advised sale is helpful.
The Panel believes that AI adoption, and indeed Consumer Duty outcome requirements, should require firms to proactively signpost to other service providers where they are unable to meet a consumer need and/or a support/service requirement.
The Panel urges the FCA to:
- be mindful that, whilst the majority of consumer retail general insurance policies are today purchased online and on a non-advised basis, this is not the case in relation to pure protection insurance where the majority of sales made result from engagement with an adviser and the provision of a personalised recommendation; and
- continue to stress to financial services firms that, irrespective of the type of sales and product, firms must pay due regard to the information and support needs of their client, particularly where they are digitally excluded, vulnerable and/or requiring reasonable adjustment.