The City watchdog has fired a warning shot at insurance firms today and told them to ensure they are supporting consumers as a cost of living crunch hits.
In a letter to insurance chiefs, the FCA warned that some people may be looking to cut back on insurance cover and it was poised to clampdown on firms rolling out unnecessary fees and add-ons.
The watchdog told firms to ensure they are “assessing customers’ needs” and avoiding the need to cancel necessary cover, in a number of recommendations designed to protect cash-strapped consumers.
The FCA’s executive director consumers, competition, Sheldon Mills said firms should “not unfairly penalise” people for payment difficulties but “work with them to find solutions”.
“We have a thriving and efficient insurance sector, and we want people getting the cover they need at a cost they can afford so both business and customers benefit,” Mills said.
“Firms must continue to provide clear information when customers renew their policy to help them decide whether they want to go ahead or shop around for a better deal.”
The FCA has been looking to clampdown on City firms and recently warned the UK’s lenders to make sure they are cushioning the blow for consumers struggling with debt.