We are reporting the findings of our thematic review which assessed how firms are operating their closed-books and whether they are treating their long-standing customers fairly. The report sets out as draft non-Handbook guidance the actions we believe firms should be taking to treat their customers fairly in the future.
In our Business Plan 2014/15, we said we would be conducting a thematic review to assess how firms were operating their closed-books and to determine if they are treating their long-standing customers fairly. We had identified some risks which could lead to long-standing customers being treated unfairly, such as firms benefitting from customer inertia by keeping them in high-charging, poorly performing products or by cutting costs in a way that was detrimental to customers.
Our findings will primarily be of interest to life insurers who have closed-books. However, some of our expectations in the draft non-Handbook guidance may be relevant to any firm that deals with customers who are of a long-standing nature. Consumer groups and trade bodies will also be interested in the themes explored in this report.
We want firms to recognise that long-standing customers may have different characteristics and needs than customers who have recently taken out a new product. We want firms to take steps to ensure that all their customers receive fair outcomes, not just those who are most engaged or have had recent dealings with them.
We invite your views on our proposed non-Handbook guidance to firms.
Please respond by 3 June 2016 (three month consultation). Send your responses by email to email@example.com or by post to:
Pensions and Retirement Income Thematic Team
The Financial Conduct Authority
25 The North Colonnade
London E14 5HS
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