CP15/41: Increasing transparency and engagement at renewal in general insurance markets

Published: 03/12/2015     Last Modified: 08/02/2016

This paper sets out proposals to introduce new rules and guidance for firms on steps they should take when renewing general insurance policies.

We are publishing this consultation paper alongside Occasional Paper No.12: Encouraging consumers to act at renewal: Evidence from field trials in the home and motor insurance markets.

Why are we issuing this consultation paper?

These proposals address concerns about levels of consumer engagement and their treatment by firms at renewal, and the lack of competition that results from this. This can result in consumers defaulting to renew products that are not good value or have become unsuitable for their changing needs.

We are proposing:

  • Rules that require firms to disclose last year’s premium on renewal notices
  • Rules that require additional disclosure when customers have renewed the same product four times or more
  • Guidance on how firms can improve their processes around renewals
  • Guidance about records that firms maintain to demonstrate compliance, including a record of premiums.

We also remind firms of their obligations to treat customers fairly when developing their overall approach to renewal pricing and in their treatment of long-standing customers.

We expect firms to present the new disclosure requirements clearly and to take active account of our discussion paper DP15/5: Smarter consumer communications.

Our proposed measures aim to increase engagement and promote competition through enhanced disclosure. We will assess the outcomes from these proposals before deciding whether we need to intervene further to address remaining inertia or other barriers to competition. The Department for Business, Innovation and Skills’ call for evidence on switching principles will be useful for informing any future action.

CP15/41: Increasing transparency and engagement at renewal in general insurance markets [PDF]

Who is this consultation aimed at?

The measures we are consulting on apply to insurers and intermediaries selling retail general insurance products. 

The intention of the proposals is to benefit consumers when renewing their general insurance policies.

What are the next steps?

We want to know what you think of these proposals. Please respond to our questions using our online form by 4 March 2016.

You can also email your answers to: 

cp15-41@fca.org.uk

Or in writing to:

Awhi Fleming
General Insurance Policy
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

We will consider all responses and aim to provide finalised rules and guidance and a Policy Statement by 2016.

Note: We make all responses to formal consultation available for public inspection unless the respondent requests otherwise. We will not regard a standard confidentiality statement in an email message as a request for non-disclosure.

Despite this, we may be asked to disclose a confidential response under the Freedom of Information Act 2000. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the Information Commissioner and the Information Rights Tribunal.

Back to top >