Insurers face renewals rules clampdown

The Financial Conduct Authority (FCA) said that some insurers are "still failing to properly implement" renewal rules that came into force in April 2017, despite it issuing a warning about compliance last October.

Under the renewal rules, insurers must "clearly show the insurance premium a customer paid last year alongside their proposed renewal premium" and also "show a prominent, clear and straightforward message to encourage customers to shop around", the regulator said.

Jonathan Davidson, executive director of supervision in retail and authorisations at the FCA, 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.  Firms failing to get this right may have led to consumers losing out as they do not have the right information to decide whether or not to shop around."

"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. As we said in October, we expect other firms to take notice of these issues, to look at what they are doing and to make sure they are getting it right," he said.

The regulator previously said that some insurers had failed to display 'shopping around' messages sufficiently prominently, were misstating premiums from the previous year, or were not identifying the customers they needed to provide with renewal information due to "system error or a mistaken interpretation of the type of customer that is captured  by our rules".

Alongside its warning, the FCA announced that RAC had agreed to contact breakdown cover customers after the regulator found that the company had not displayed "the prior and current year premiums, and shopping around message as key information in its breakdown policy renewal documentation".