FCA warns insurers to comply with renewal rules

The financial watchdog has warned it will clamp down on general insurance companies that fail to supply customers with pricing information or encourage them to shop around for a better deal.

Under rules introduced in April 2017, when policies come up for renewal, general insurers are required to show a customer the price they paid last year alongside the proposed new premium. They must also encourage the customer to shop around in a prominent, clear message.

The Financial Conduct Authority said companies were still flouting the rules even after it warned about failings in October. It told senior management to take immediate action to comply after ordering RAC, the breakdown car insurance company, to stop leaving out information.

RAC failed to display prior and current year premiums or to present the shop-around message as key information when offering customers a new breakdown policy.

Jonathan Davidson, the FCA’s head of supervision – retail and authorisations, said: “It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules.

“We have already acted where we have seen particularly poor practice in firms and will continue to do so where we see firms not being transparent.”

In October the FCA found companies failing to implement the rules for all products or customers, misstating the previous year’s premium, leaving out or burying the shop-around message, or not identifying all customers who needed renewal information.