Consumer Duty and Multi-Occupancy update

We are now live with Consumer Duty the FCA has urged firms to get on with it! Sheldon Mills, Executive Director of Consumers and Competition, warned that firms who ignore it or who pose the most harm can expect swift action.

“Our supervisory and enforcement approach will be proportionate to the harm - or risk of harm - to consumers, with a sharp focus on outcomes. We will prioritise the most serious breaches and act swiftly and assertively where we find evidence of harm or risk of harm to consumers. In some cases, firms can expect us to take robust action, such as interventions or investigations, along with possible disciplinary sanctions.”

52 million financial services consumers in the UK rely on the sector to deliver good outcomes, and should be even better protected from harm, particularly in these challenging economic times. The Duty will mean that consumers should receive communications they can understand, products and services that meet their needs/provide evidenced fair value, and they get the customer support they need, when they need it.

The current cost of living squeeze makes it all the more vital consumers get fair value, and this should also benefit the competitiveness of the industry as firms strive to offer the best to compete for customers.

Market-wide portfolio letters were sent on 20 September 2023 highlighting key areas required for improvement across personal/commercial/wholesale lines and their contents will be part of the talk.

Most importantly, we will also cover the new rules that are effective from 1 January 2024 on multi-occupancy insurances following intervention by the government – these new rules will impact over 5 million leaseholders who will be defined as stakeholders and firms will have to act in their best interests and no commission sharing will be allowed with PMAs unless clear value to the leaseholder is evidenced. Insurers and brokers will also need to provide more information about policies to leaseholders, including details of all remuneration and placement. We will also cover the Leasehold and Freehold Reform Bill which will see the ban of commission sharing plus what insurers have been doing to implement these rules.

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

Where we are with Consumer Duty and what you should have done;

Current issues when it comes to general insurance:-

• Key aspects of the product governance rule to include product value assessments;
• New rules on multi-occupancy insurances and the ramifications of this for insurers and brokers alike.