Context
The FCA has begun a piece of market engagement work focusing on the product governance elements of its general insurance pricing practices rules introduced by policy statement PS21/5, which came into effect on 1st October 2021.
Key points to note
A sample of firms who have manufacturing responsibilities has been selected, which includes MGAs and insurance brokers. The multi-firm work will consider whether these firms have:
- adopted appropriate approaches and controls frameworks, towards product value generally;
- taken adequate steps to implement the product governance and oversight improvements required by PROD 4.2; and
- implemented the additional controls and reporting in relation to GI Value Measures Reporting.
An information request has been sent out to those firms in the sample. The FCA has advised that this initial request has been designed with the intent that it does not create a significant burden and is asking for information and documentation that firms should already have rather than needing to create anything bespoke or new.
Next actions
The information will be analysed during Q2 of 2022. A number of firms will then be included in a further, and more detailed, phase of work which will commence in the second half of 2022. Where any areas of potential harm are identified the FCA may look to take regulatory actions and report anu issues or concerns as is necessary.