The Financial Conduct Authority (FCA) recently published its policy statement outlining the new rules to be implemented for General Insurance Pricing Practices (GIPP). In this article we set out what the new rules are, who they apply to, and the impact of the new rules for the general insurance sector. The first set of rules will need to be adopted by firms from 1st October 2021, followed by further rules from the 1st January 2022.The full FCA policy statement can be found here:


In 2018, the FCA conducted a market study which found that the home and motor insurance markets were not working well for all consumers. The study found that firms use complex and opaque pricing techniques for home and motor insurance to identify customers who are more likely to renew with them. Firms then increase prices for these customers each year at renewal, in a process known as ‘price walking’. The findings demonstrated the home and motor markets appeared to be failing to achieve fair value for consumers with policyholders effectively being punished for being loyal customers. The FCA found customers who stayed with an insurer for several years, were paying higher year on year premiums, even though their risk profile had remained the same. The income gained from this “loyalty penalty”, was then used to offer discounted policies for new customers.

For financially sophisticated and tech savvy consumers, the process of price walking was unlikely to be causing customer detriment, as they had the financial knowledge and technological ability to change motor or house insurance providers each year, thus taking advantage of the new customer offers available. However, price walking was found to cause customer detriment to many vulnerable customers who lacked the financial or technological knowhow to switch their provider each year.

As a result of potential customer detriment being caused by “price walking”, the FCA published a consultation paper setting out a proposed package of remedies to improve competition and ensure firms offer fair value products in the future.

ICSR issued a guidance note on the intended changes back in October 2020, this article can be found here: Pricing – ‘Fair Value’ Is Not Just A Household And Motor Issue.

Now the FCA has received feedback on their consultation, they have outlined the new rules and requirements to address the harms identified. The changes are significant and include:

  • A pricing remedy;
  • Enhancements to product governance;
  • Rules to offer a range of accessible and easy options for consumers who want to cancel auto renewal contracts;
  • Reporting requirements for home and motor insurance markets.

The Pricing Remedy

The FCA has introduced a ‘pricing remedy’, which means firms must now offer a renewal price to a consumer that is no greater than the equivalent new business price (ENBP) offered to a new customer. Therefore, firms would not be able to increase prices for renewal customers without also increasing the prices they offer the new business customers.

Firms And Products Within Scope

The pricing remedy applies to firms operating in the retail home and motor insurance markets. Insurers, brokers, MGAs, and other parties involved in the production and distribution of a retail home and motor insurance products will be required to adhere to the pricing remedy. This includes firms managing a book of business in run-off if the relevant contracts are being renewed and Appointed Representatives of regulated firms.

The Rules And Implementation Date

The new pricing rules will apply at the point when a firm prepares a customer’s renewal notice, not at the point the customer’s contract is renewed.

The FCA acknowledge that the renewal quotation may differ from last years premium due to changes to the consumer’s risk profile. Therefore, the ENBP should reflect the customer’s actual risk upon renewal, regardless of whether that has increased or decreased over the term of their insurance. In order to determine the actual risk, firms should:

  • request from the customer information that would have been asked if they were a new business customer; or
  • information about new business customers that would be available to the firm from other external sources of information.

Firms already have an ongoing obligation to ensure the insurance contracts are consistent with the customer’s demands and needs under ICOBS. If firms do not have sufficient information to satisfy themselves that a renewal contract is consistent with those needs, the FCA now expect firms to obtain additional information before proposing a renewal. As part of the record-keeping requirements, firms also need to record how they ensure customers of longer tenure are fairly treated.

Under the new Product Intervention and Product Governance Sourcebook (PROD) rules firms will need to consider how they use customer payment methods to determine the risk price and whether this is consistent with providing fair value. Firms would be contravening the fair value requirements if they increase the price of insurance products because the customer is purchasing the policy using retail premium finance unless the firm has an objective and reasonable basis for making the change. Where firms do not have a record of the original distribution channel, firms will be required to use the channel most commonly used by new business customers when calculating the ENBP.

The FCA have outlined the requirements for the continued use of incentives or ‘Discounts’ for new business customers. The FCA identified that consumers found it more difficult to determine their expected long-term price when presented with cash or cash-equivalent incentives. As a result, firms are now required to include both cash and cash equivalent incentives that are offered to new customers in the ENBP.

The rules on incentives apply equally to all firms setting renewal prices. A firm that does not set renewal prices would not be involved in ‘price walking’ and so will not be caught by these rules. If a firm that sets the renewal price funds a cash or cash-equivalent incentive that is given to customers by another party in the distribution chain, then the firm that funded the incentive will still need to include it in the ENBP for renewing customers. Firms should also ensure the presentation of incentives is clear and does not confuse or disguise the price of the insurance product. The new pricing rules should complement ICOBS 6.5, which states firms are required to disclose the renewal price and the previous year’s price as part of the renewal notice.

The FCA have introduced rules for firms with ‘closed books. Closed books are products for which there are no, or relatively few, new business customers. Products that have been on sale for 5 or more years will only be considered closed if the firm has not sold, or does not expect to sell, on an annualised basis, more than 7.5% of active policies under the product to new business customers. For products that have been sale for less than 5 years the threshold will be 15%.

The thresholds are designed to prevent renewal prices being based on ENBPs set at levels that are uncompetitive with open book products. Firms are required to calculate the renewal prices for closed book products with reference to the ENBPs of close matched products. Firms should not be able to charge higher renewal premiums to existing customers by closing books. This aim is to ensure that customers in closed books are not subjected to price walking in the future.

The responsibility of adherence to the pricing remedy will sit with a senior manager to regularly confirm the firm’s pricing models comply with the pricing remedy. Firms will be required to submit a new form via the RegData platform, the senior manager will need to attest whether they are satisfied that the firm meets the pricing requirements. If the firm is subject to SM&CR, the person making the person making the attestation needs to hold a relevant Senior Manager Function (SMF). This will bring personal liability to the individual concerned. Where the firm is not subject to the SM&CR, which includes firms based in Gibraltar or subject to the temporary permissions regime, the person making the attestation must be a director of the firm.

Implementation Date: 1st January 2022

Impact On The market

The FCA have clarified their anti-avoidance measures. Firms should not operate in a way which frustrates the intended outcomes of the pricing remedy. This means they must not charge higher prices for renewal customers than they would for new customers for the same risk. The FCA is concerned that reduced income as a result of the pricing remedy may lead firms to charge higher fees for renewal customers. They have made it clear that firms cannot charge a customer a higher fee at renewal than if they were a new customer. This will apply to both insurers and intermediaries, for both current and closed books. However, it will only apply to arrangement fees that are charged as part of the insurance distribution process (including distribution of renewals). It will not apply to contingent fees, such as fees for mid-term adjustments. Firms are already required to clearly disclose all fees that customers are required to pay.

As we have already highlighted, to comply with SM&CR (if applicable), an SMF holder will need to attest that the firms is adhering to the pricing remedy. Firms will also need to ensure where they have an appointed representative (AR), the AR is also applying to the pricing remedy. This is another reminder of the principles duty to have appropriate oversight of your AR’s.

The FCA are not mandating for firms to retain records, nor are they mandating specific documents that must be created to meet their requirements. Instead, firms should consider what records are most relevant for their business model. However, the FCA have indicated that records should be kept on how a decision has been made on pricing, this may include minutes from committee meetings. A failure to maintain these records could increase the exposure of the relevant SMF.

The introduction of the pricing remedy is to level the playing field between existing customers (renewal customers) and new customers. This change is long overdue and should increase competition within the home and motor insurance products including making it easier for new entrants to join the market. For consumers who have remained loyal this should come as a welcome boost as their renewal price is reduced, pending any changes in their risk profile. It should also mean that vulnerable customers are no longer paying more for their cover simply because they were unable to switch.

On the flip slide, consumers that have generally shopped around each year to find the lowest price will now likely pay more as new customers as firms look to balance the books. In our view whilst the focus of the pricing remedy is to ensure consumers are not penalised for their loyalty, it also provides an opportunity for firms to review their pricing models to ensure they remain appropriate for the risk profile of their customers. With further limitations on incentives for new customers to ‘sign up’, firms will need to decide if they compete solely on price or improve the customer experience to stand out from the crowd. The reality is the reduced revenue from renewal business is likely to lead to more targeted pricing, which may mean those considered higher risk, e.g., young drivers for motor insurance, or households in high crime areas find their premium is raised first.

Actions Firms Will Need To Take.

Firms will be required to assess if their books meet the definition of a closed book at least once a year. It would make sense for firms to carry out this assessment at the same time they review products under the product governance rules. Firms will also need to make an assessment at any time they make a material change to the distribution or marketing of the product that could change the status of the book. Firms should also consider:

  • Reviewing Business Models/plans, especially if a firm’s business strategy heavily relies on attracting new customers with low introductory premiums and then price walking;
  • Reviewing and potentially rethinking Pricing Strategy;
  • If new Pricing Strategy is going to be implemented, firms should consider how they will communicate this to existing customers;
  • Reviewing and potentially redrafting Underwriting Guidelines;
  • Redraft POG Policy to ensure it includes pricing remedy considerations;
  • Ensure pricing remedy considerations have been included in any product approval and product review documentation;
  • Allocation of “Pricing Responsibility” to Senior Manager and re-draft of Statement of responsibilities;
  • If a principal firm and AR sets price, monitor their adherence to this new rule, new MI may be required from ARs, which will need to be built into any existing MI frameworks.

Product Governance

The FCA are broadening the scope of the Product Intervention and Product Governance Sourcebook (PROD) to ensure firms have processes in place to deliver products that offer fair value to customers.

Firms And Products Within Scope

The current product governance rules require firms after 1 October 2018 to have appropriate processes in place when manufacturing, distributing, and managing products manufactured or significantly adapted. The scope of the rules has now been extended to all general insurance and pure protection products regardless of when they were manufactured, this includes products in run off. The new requirements will apply to core products and additional products, including premium finance distributed alongside insurance products. Insurers, Brokers, and MGAs involved in the manufacturing and/or distribution of these products will need to adopt the new requirements.

The Rules And Implementation Date

The FCA’s focus is to ensure firms deliver fair value for general insurance and pure protection products to customers and have strong governance and oversight arrangements in place to support this. The FCA define fair value as being the relationship between the total price to the end customer and the quality of the products and services.

To achieve this, the FCA are broadening the scope of the Product Intervention and Product Governance Sourcebook (PROD) and enhancing it with new obligations on firms to address the harms identified.

The current PROD rules apply to all products from 1 October 2018. Firms have a year after the new rules are applied to conduct a product approval process to any existing products that did not fall within the current PROD scope, and to update their approval for any in-scope products to take into account the new requirements on fair value. Additionally, firms will be expected to undertake a review of products at least every 12 months, or more frequently if the risk of harm is high.

In addition to these changes, the FCA have set out new rules for both insurers and any intermediary firm involved in the product manufacture, they are:

  • Make sufficient information available for distributors so they understand the intended value of the insurance product;
  • Make it clear what possible impact the distributor’s actions can have on the intended value;
  • Obtain detail on the type and amount of remuneration of each person in the distribution arrangement. This will involve manufacturers obtaining information from the distributors on commissions and, if applicable, also fees paid by customers in respect of products they manufacture;
  • Obtain an explanation of the services provided by each person in the distribution arrangement. This is to enable the manufacturer to identify the person’s role in the distribution channel.

Firms should consider the value that a product (or package of products) is likely to offer throughout the life of the product – at inception, through the initial insured period and at subsequent anticipated renewals.

The FCA have also set out new product governance rules for insurance distributors, who are now required to:

  • Ensure they understand the value assessment that the manufacturer has undertaken, so that they can distribute the product accordingly;
  • Consider the impact of their distribution strategy and process has on the value of the product. This includes considering any remuneration they receive as part of the distribution strategy and ensuring that it does not result in the product failing to offer fair value to the end customer;
  • Provide information to support the manufacturer in their product reviews;
  • Amend their distribution processes if they identify it results in harm to customers. This should include taking appropriate remedial action.

The FCA have also clarified their position on Premium Finance. Premium Finance is an additional product which is governed by the Insurance Conduct of Business Sourcebook (ICOBS) and, in particular, the requirements in ICOBS 6A.2 (optional additional products) and 6A.3 (cross-selling).

Firms must not propose premium finance arrangements to customers where this would be inconsistent with the firm’s obligations, including the customers’ best interest rules. If firms do offer retail premium finance alongside insurance products, they will be required to do the following:

  • Be clear about the cost of premium finance arrangements and make clear to customers that the use of premium finance makes the contract more expensive;
  • When firms give customers a choice on whether or not to take out premium finance, they must do more than simply ask the customer to choose between paying monthly or annually;
  • Are not influenced by remuneration to offer premium finance at higher rates of interest than are available elsewhere;
  • Assess whether current premium finance arrangements are in the best interest rule captured under ICOBS.

Implementation Date: 1st October 2021

Impact On The Market

The overarching aim of the new product governance rules is ‘fair value’. The FCA have focused on the role played by both manufacturers and distributors of products in delivering a product that meets the needs of the consumer without having overly complicated and expensive manufacturing/distribution processes which is ultimately added to the price of coverage. The further clarification on what is expected with premium finance arrangements demonstrates the FCA feels work is still required to ensure the consumer understands the implications of using premium finance, especially when the consumer is vulnerable. This is building on the existing ‘best interest rule’ under ICOBS and should mean consumers are sufficiently informed on whether premium finance is the right route for them.

As already discussed as part of the pricing remedy, firms that are subject to the Senior Managers and Certification Regime (SM&CR) will be required to ensure that their senior manager with responsibility for product governance and pricing ensures the firm is in compliance with these rules.

Firms will already be familiar with the requirement to apply a product approval process to any existing products that did not fall within the current PROD scope. There will now be additional requirements for manufacturers and distributors which will need to be implemented by the 1 October 2021. This is not a long timeframe, especially if the current manufacturing and distribution channels are fully embedded, with a large number of customers to consider.

Actions Firms Need To Take:

  • Review customer policy documentation;
  • Identify and resolve any customer harm identified;
  • Review POG Policy. Procedures and POG schedule;
  • Allocation of Product Governance responsibility to Senior Manager and re-draft of Statement of responsibilities;
  • Review the current manufacturing process and distribution channels to ensure they remain appropriate given the new requirements;
  • If products are distributed via a distribution chain, manufacturers must ensure an appropriate MI framework is in place, allowing easy reporting of remuneration amount and type up the chain;
  • Manufacturers may need to consider providing product “value” training to each distributor in the distribution chain as part of any new product launch;
  • Redraft product approval and review documentation, to include an explanation of the services provided by each distributor in the chain and their proposed remuneration;
  • Review premium finance arrangements;
  • Update internal systems where required to ensure the data is available to identify current renumeration for each entity involved the distribution channel.

Cancelling Auto Renew Policies

The FCA are concerned that some firms are using auto-renewal within the home and motor insurance products in a way that could discourage consumers from switching when it would be in their interest to do so. Some firms can impose unreasonable barriers on consumers exiting auto-renewing contracts, for example, requiring contact by phone rather than allowing cancellation online.

Firms And Products Within Scope

The changes will apply to all types of general insurances, with the aim being that barriers to exit are reduced, allowing consumers to opt out of their product more easily upon renewal. This means that Insurers, Brokers and MGA’s operating in the general insurance market will now be subject to the new rules. The FCA found that many consumers with general insurance products did not know if their product was on auto renewal. The aim of the changes is to allow consumers to switch provider more easily, but it should also raise awareness for the consumer about the risk associated with having an auto renewal policy.

The Rules And Implementation Date

The FCA now expect firms operating in general insurance space to offer the consumer a variety of channels if they choose to opt out of their current contract upon renewal. These channels include, post, online, telephone or by email. However, not all firms continue to operate via all of the channels listed. The FCA has allowed some flexibility, but firms will need to allow consumers to opt-out of auto-renewal using at least the same methods by which they allow consumers to purchase a new policy. When determining what cancellation methods to provide to consumers, firms must also consider their needs, including those who originally took out their policy using a channel they no longer offer for new business, or those whose product is closed to new business.

As the Treating Customers Fairly (TCF) outcome 6 makes clear, firms are expected to ensure that consumers do not face unreasonable post-sale barriers, it feels reasonable that firms should provide the same channel for cancellation that they offered when the product was purchased, especially if the consumer is considered ‘vulnerable’. Firms should provide a choice of communication methods for vulnerable customers, which they can use effectively and feel comfortable with.

Firms are required to make it clear to the consumer at the point of sale and at renewal that the policy is set to auto renewal and what this means for them. Firms will need to communicate this in good time ahead of the expiry of the contract, as well as making it clear to the consumer that they have the right to cancel the contract if they so wish.

Impact On The Market

The rule changes are likely to lead to an increase in manual renewal customers and reduced retention rates. Ultimately, if the consumer is happy with the product, they are more likely to renew. Firms should focus on ensuring they offer a good level of service throughout the policy period if they want to maintain the same retention levels. This may include outlining the benefits of auto renewal, for some consumers it means they continue to receive cover without having to lift a finger, consumers less price conscious are more likely to remain on auto renewal.

Those consumers who wish to ‘opt out’ should now find it easier to cancel the contract if they are unhappy with the product and/or service, this is a good for the consumer, for firms this can provide an opportunity to improve the customer journey. Customers who opt out of existing contracts in search for a lower price may find that cheaper prices are no longer as readily available due to the changes brought in by the pricing remedy. With many consumers now purchasing general insurance cover online, improving the online offering could be an area of focus for firms to retain existing customers and attract new ones.

Implementation Date: 1st January 2022

Actions Firms Need To Take

In order to meet the new requirements, firms will be required to identify which policies are set to auto renew and communicate this to the customer. The communication will need to be in good time to allow the consumer to consider their options, which may include searching the market for alternative coverage, firms should also consider:

  • Reviewing the customer renewal process to ensure it complies with new rules;
  • Reviewing renewal documentation to ensure it complies with the new rules;
  • Reviewing current pricing strategy to remain competitive;
  • Improving the customer journey to maintain the current client base and attract new customers;
  • Outline the benefits of auto renewal to consumers.

Reporting Requirements

The FCA have introduced new reporting requirements which require regular reports showing pricing information for home and motor insurance as well as add-ons and premium finance sold alongside these products.

Firms And Products Within Scope

The reporting requirements are for Insurers, Brokers, MGA’s operating in the retail home and motor insurance products. The reporting is not intended to be a detailed examination of firms’ pricing models, but it will allow the FCA to identify areas that require further investigation and where consumers continue to face harm.

The Rules And Implementation Date

In order to assess the impact of the pricing remedy on customers, the FCA will require firms to provide data on each product split by:

  • The sales channel, including direct (phone, online and branch), intermediated, intermediated via price comparison websites, and affinity/partnership channels;
  • The length of time a customer has held their insurance with the firm;
  • Insurers and price-setting intermediaries will be required to report data on both the net price (charged from the insurer) and the gross price (charged to the consumer);
  • Insurers and price-setting intermediaries will also be required to provide data on closed books as this is seen by the FCA as an area at higher risk of price walking.

In order to monitor Compliance with the pricing remedy, firms will be required to report the following data:

  • The total and average premium charged to customers, net of Insurance Premium Tax;
  • The average prior year premium for each reporting category of customers renewing;
  • Net and gross price for intermediated and affinity/partnership sales;
  • The number of policies incepted/renewed during the reported period;
  • Expected claims cost and expected claims ratio.

The purpose of collecting premium data is to show whether, on average, longer standing customers are paying higher prices. This could indicate firms are not complying with the core pricing remedy. The FCA also want to look at premium over time in relation to the expected claims costs i.e., expected claims ratio to see if there are differences between the expected claims ratios for new business customers and longstanding customers. The average prior year premium data will provide detail on how prices had changed year on year for renewing customers and help mitigate the issue of changing business mix for different tenure points.

In addition, to help identify where there may be instances or pockets of consumer harm, firms will be required to submit the following data:

  • The expected claims ratio in 10 percentage points intervals for each product broken down by channel and tenure;
  • Gross incurred claims ratio and prior year reserve releases and strengthening;
  • Total prior year’s reserve releases;
  • Total Prior year’s reserve strengthening.

The data collation on the claim’s ratio will help the FCA understand the value of the product to the consumer. This will help the FCA and indeed firms understand whether firms are over or underestimating their claims cost. The prior year’s reserves will help the FCA understand firms reserving allocation is sufficient to meet their claims costs.

The final set of reporting requirements concern the market as a whole. Many firms will be concerned by the new requirements, especially their effect on profitability. The FCA are concerned that firms my raise the prices for premium finance, additional products, or fees and charges to compensate. So, in addition to the metrics laid out above, firms will also be required to provide the following:

  • Premium finance charged to customers (total charged, number of policies sold with premium finance, APR range);
  • Additional products (total charged and number of additional products policies sold);
  • Pre-contractual fees and charges;
  • Post-contractual fees and charges.

The firm setting the price would be best placed to report the data to the FCA. The data for ad- ons and premium finance will need to be split between motor and home products. This will allow the FCA to monitor the extent to which the pricing remedy has driven changes in premiums charged. The premium finance rules will provide the FCA with an insight into the number of customers who use premium finance, the APR cost and how it changes over time. The FCA will require detail on all pre and post contractual fees and charges, this includes charges separate to premium, such as administration charges, broker fees, or Partner/affinity fees. This information will be collated to monitor the effectiveness of the pricing remedy, i.e., are renewal customers still being charged higher fees than new customers.

Impact On The Market

Given the extensive requirements, firms will be wondering who needs to report this and when. The FCA have been descriptive on where the responsibility lies. We have set out who is responsible below:

  • Core products (including cover options and optional extras): The insurer of the core product and price-setting intermediary (where they set the final price) are responsible for reporting the data;
  • Add-on products: Only the firm setting the price of the add-on product to consumers is required to report add-on product pricing data;
  • Where the add-on product is premium finance and the price is set by a retail premium finance provider then the insurer, insurance intermediary or managing agent which has the direct relationship with the consumer must report the pricing data for that business;
  • Fees: Only the firm charging the fee to the customer is responsible for reporting the fees for that business.

In terms of when, the FCA have a phased approach. Firms will be required to report GI Pricing Practices data in a single interim report covering the six-month ended 30 June 2022. This report will not need to include current and developed gross incurred claims ratios and reserve movements. Firms will be required to submit attestation three months after the rules come into force (i.e. 31 March 2022) confirming compliance with the core pricing remedy and sales practices.

Actions Firms Need To Take

  • Ensure that you have the MI framework in place to adhere to the new rules;
  • Ensure the MI goes into POG;
  • Senior Management should be aware of the changes to ensure the required data is collated;
  • IT systems may need to be updated to pull off the required MI;
  • Resourcing consideration as the MI is resource intensive.

Implementation Date: 1st January 2022


The rule changes are set to have a seismic effect on the general insurance market. The headline “price remedy” rule changes could have a significant impact on the motor and insurance market, with insurers and brokers who previously relied on price walking to sustain a profitable business model now required to change their pricing strategy or face enforcement action. This could lead to some household and motor providers exiting the market. The effect on consumers could also be substantial, with loyal customers who have been overcharged for several years, now seeing their premium reduced.

On the other side of the coin, consumers who regularly shopped round upon renewal for a new provider, will see less attractive new customer offers available to them in the market. If price is no longer the key consideration, Insurers, Brokers, and MGA’s will need to consider how they will differentiate their offering from the competition. For those who have already focused on the customer experience rather than the lowest price, the pricing remedy will be welcomed. They have invested in their product coverage, slick online solution, and quick claims turnaround. As a result, they are already one step ahead of providers who traditionally targeted consumers on price alone.

The pricing changes will need to be considered by all areas of the business. Companies who have large renewal margins may find profits are reduced. This could mean insurers look to reduce their distribution channel and sell more on a direct basis, it may also mean staff numbers are reduced to claw back some of the lost revenue. Brokers could be the hardest hit where insurers have the option to sell direct.

Each firm will need to look at the effect of the pricing remedy and assess what is needed to ensure they remain competitive going forward. This includes Price Comparison Websites (PCW) who will need to consider how they update their offering.

The introduction of the pricing remedy could have a wider effect across financial services, where we may see further changes, which may include mortgage and cash saving products. The competition and Markets Authority (CMA) are conducting research on the economic impacts of loyalty penalties, this is due to be published by the end of the year, which could lead to more expansive changes.

The enhanced product governance requirements for all general insurance pure protection products aims to ensure firms consider the longer-term value of their products to customers. Insures, Brokers and MGA’s have already been undertaking a review process of their legacy products, but the introduction of further specific requirements on manufacturers and distributors demonstrates the FCA feel further work is required to ensure fair value to the consumers.

The requirement for a Senior Manager or director (outside of SM&CR) to ensure the product governance rules are followed brings individual responsibility to the frame, this should help to ensure the rules are adopted.

The changes to the auto renewal process will be an opportunity for many consumers to search the market for a better valued product, whether that be price or otherwise. This will certainly be the case for consumers who have been unhappy with their existing contracts but have found it difficult to leave due the unfair barriers introduced by firms.

The new product governance rules will be introduced as of 1st October 2021, with the rules from the pricing remedy, auto renewals and reporting requirements taking effect from 1st January 2022. The FCA expect firms to adopt the rules within this timeframe, as we have outlined the changes are significant, firms should begin to consider how they will adopt the changes now. Following the implementation of the new rules the FCA will monitor their effect on the market. The FCA will use the reporting data to identify firms that continue to engage in price walking and will look to hold them to account. The FCA also plan to undertake a longer-term evaluation of the effectiveness of the new rules in the first half of 2024, indicating this is an area the FCA will continue to monitor to ensure the consumer is offered fair value.

If you would like to find out more about the new rules on Genereal Insurance Pricing Practices, or discuss any aspect of the way your firm is responding, please feel free to contact any member of the team in complete confidence.

Nicky Hasler

Nicky Hasler

Senior Consultant
Implement Compliance Solutions & Resources


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