Watchdog to crack down as insurers flout rules

CITY regulator the Financial Conduct Authority (FCA) has warned it will take action against insurers if they do not play an active role in encouraging customers to shop around for the best deal.

As of April last year the FCA has required all insurance firms to show customers what their previous premium was as part of their renewal notices.

Firms must also make it clear in all renewal letters that customers could get a better deal by shopping around with other providers.

However, the regulator said a number of firms, including RAC, have yet to properly implement the rules.

Jonathan Davidson, executive director of supervision, retail and authorisations, at the FCA, said: “It is simply unacceptable to see that some firms are still not being properly transparent

It is at best a gross oversight and at worst an effort to hide price hikes

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.”

Dan Hutson, head of motor at price comparison site Compare the Market, said the lack of action by some insurers regarding the rules is “very concerning”.

He added that not adhering to the FCA’S rules a year after they were introduced is “at best a gross oversight and at worst an effort to hide the renewal price hikes and the benefits of switching provider”.