Consumer Duty Update and New Rules on Multi-Occupancy Insurances

Soon we will have had Consumer Duty for a year and firms will be preparing for their first annual board reports.

On 20 February 2024, the FCA updated the sector with the following:

“What firms are doing well and what they could do better. The Consumer Duty came into force for open products and services on 31 July 2023. We welcome the improvements made by many firms to deliver better outcomes for their customers. However, some firms are lagging behind. Under the Duty, firms must act to deliver good outcomes for retail customers. Firms should aim to continuously address issues that risk causing consumer harm. We have committed to highlight good practice and areas for improvement.”

Further on 23 February 2024 they issued a 14-page letter following a Product Governance Thematic Review (which is a key part of Consumer Duty). Here they said:

“In March 2023, we began a thematic review assessing insurance manufacturers and distributors product oversight and governance arrangements and whether firms are meeting their obligations and our expectations. The background to our review and details of the work we have undertaken are set out in the annex below. We are sharing our key observations and concerns, so that manufacturers can take swift action, where necessary.”

The session will cover the above two updates as well as the new rules that are effective from 1 January 2024 on multi-occupancy buildings insurances following intervention by the government – these new rules impact over 5 million leaseholders who are defined as stakeholders and firms have to act in their best interests. Insurers and brokers will also need to provide information about policies to leaseholders, including details of all remuneration and placement. We will also cover the Leasehold and Freehold Reform Act which has banned commission sharing.

Learning Objectives - by the end of this update you will gain an overview of:

1. Where are we with Consumer Duty and what you should have done.
2. Current issues when it comes to general insurance:
• Key aspects of the product governance rule to include product value assessments and challenges to fair value incl. broker fees/charges/add-ons and premium finance.
• New rules on multi-occupancy buildings insurance and the ramifications of this for insurers and brokers alike.

Consumer Duty Update and New Rules on Multi-Occupancy Insurances

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