Insurers in Britain that are not ready to implement tougher ‘value for money’ rules on car and home policies could face disciplinary action, the Financial Conduct Authority said on Wednesday.
The FCA found in May that loyal customers were not getting value for money, and that 6 million policyholders would have saved 1.2 billion pounds ($1.65 billion) if they had paid the average instead of high prices actually paid.
It set out enhanced rules from October to ensure people renewing home and motor insurance did not pay more than new customers. They also made it simpler to stop automatic renewals.
“We know some firms are doing the right thing but with the deadline for implementing our enhanced rules less than two months away, it’s worrying that some firms may not be ready,” Sheldon Mills, the FCA’s executive director for supervision, policy and competition, said in a statement.
The FCA said its latest review found insufficient focus on customers, outcomes and product value, including when considering the context of COVID-19. There were also shortcomings in governance and oversight of products, it said.
Some firms have significant work to do, Mills said. “Firms that fail to do that work risk regulatory action,” he added.
($1 = 0.7285 pounds)