LMA – Collaboration eases new compliance challenge

Every carrier and intermediary would agree with the Financial Conduct Authority that customers should receive fair value from the insurance products they buy. Most, I think, would also agree that embedded distribution costs are sometimes higher when dealing with London. Finally, I know for a fact that everyone believed we had to work together in response to the FCA’s recent requirements to assess and evidence fair value.

The FCA’s new Policy Statement PS21/5 on General Insurance Pricing Practices brought in a suite of measures designed to tackle what the FCA believed to be some sharp practice in the industry, including differential renewal pricing and certain features of auto-renewals.

The Lloyd’s market was supportive of the FCA’s direction, however, the devil is always in the detail.