The Financial Conduct Authority (FCA) has written to insurance industry CEOs to make customers are protected from unfair penalties, add-ons and unnecessary products during the cost-of-living crisis.
According to the FCA, when poor practice is found, it will step in to intervene to protect customers from harm.
The FCA said that companies can help customers in financial difficulty by reassessing customers’ needs, considering whether there are other products that better meet their needs and providing clear information to consumers about the additional cost of premium finance.
In addition, companies can work with customers to avoid the need to cancel necessary cover, waive fees associated with adjusting a customer’s policy in line with the reassessments and considering whether cancellation fees should be removed for customers in financial difficulty.
FCA 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.”
FCA executive director of consumers and competition Sheldon Mills added, “Customers who are struggling with their finances should contact their providers as soon as possible. We encourage customers to continue to shop around to find the best deal.
“Firms should not unfairly penalise them for any payment difficulties but instead 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.”
The FCA recently revealed it is establishing a new advisory committee to its board to work on ESG challenges.
Earlier this year, the board of the FCA decided to establish a brand new ESG Advisory Committee to help execute its ESG-related responsibilities.
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