The City watchdog has vowed to update guidance for insurers on protecting customers amid the UK’s cost-of-living crisis.
The UK’s Financial Conduct Authority (FCA) today set out plans to expand guidance, which was first introduced during the pandemic, to ensure all struggling customers are protected.
Under the FCA’s proposed new guidance, insurers will be expected to consider whether a different product might be more suitable for any potential customer that may be facing financial difficulties.
The new rules are also set to see insurers expected to consider whether they should waive cancellations fees and other costs associated with adjusting an existing customer’s policy if they are facing financial difficulties.
The guidance, which the FCA is currently consulting on, is set to clarify more broadly what is expected of insurers in spotting and responding to customers dealing with the UK’s cost-of-living crisis.
Sheldon Mills, the FCA’s executive director of consumers and competition, said: “Access to insurance is vital, providing peace of mind and security in case things go wrong.”
“By extending our guidance we are helping consumers keep that safety net, and ensure they’re properly supported when they claim, even as the cost-of-living increases,” Mills added.
The FCA’s proposals come after the City watchdog in December warned insurers against undervaluing cars or other insured items when settling claims.
The regulator warned that it had seen evidence of customers being offered a lower payout for cars that had been written off than the vehicles fair market price, as soaring inflation has driven up costs.
The FCA’s rules mean insurers must also make sure any information they give to customers is fair, clear, and not misleading in order to ensure customers can make informed decisions.
The watchdog’s plans come as part of its wider strategy to deliver better outcomes for consumers, while taking a “tougher” stance on financial services firms.