Consumer renewal Information requirements

We have been in touch, on a couple of occasions, on this subject and thought we should remind you of the requirements (which were effective 01.04.17) following recent press coverage of the rework required of Admiral in this regard (copy article below). 

The FCA had confirmed that it will be implementing revised rules requiring additional information to be provided to consumers at renewal. 

From 1 April 2017, clients must be provided with: 

• Confirmation of last year’s premium (updated to reflect any mid-term changes). 

• A statement along the following lines “have you checked that your insurance cover still meets your needs? Have you considered shopping around to find the best deal for the cover you want?” 

• For any clients that have been with you for more than three years, the fourth renewal invitation to the client must include the statement “You have been with us for a number of years. You may be able to get insurance cover you want at a better price if you shop around.” 

  To reiterate, the requirement only covers consumer policies (private car, home insurance, travel etc.).  

  We are aware that software providers have not made this as easy as it should be so believe this is still a work in progress for some firms but it is clear that the FCA is looking at this quite closely. 

  Insurance Age article 

  ‘Insurer agrees with the regulator to contact all affected customers, following change in renewal rules from 1 April.

  Admiral has agreed to contact customers who may have been given inaccurate information in renewal documents. This follows the new rules introduced by the Financial Conduct Authority (FCA) in April this year which require firms to show clearly the insurance premium a customer paid last year alongside their proposed renewal premium.

  The regulator stated that it had found that Admiral included inaccurate premium amounts in renewal documents issued to some customers. It detailed that the insurer had published last year’s quoted premium, before discounts were applied, rather than what the customer actually paid.

  Changes

   According to the FCA, Admiral will now make changes to ensure it is fully compliant with the new rules. Admiral has agreed with the FCA to contact customers who have renewed their policies after 1 April 2017. In addition, if affected customers choose to go to another insurer as a result, they will be able to cancel without penalty and will have their premium refunded.

  The watchdog noted that it is currently assessing firms’ implementation of these rules to ensure customers are given clear and fair disclosure on their renewal prices. It added that it had seen good practice from companies in the sector, but warned that it had also found some concerning examples and will continue to address specific concerns with individual businesses.

  Action

   Jonathan Davidson, executive director of supervision- retail and authorisations at the FCA, said: “It is vital that insurers give customers the right information so they can easily compare premiums and make a choice whether to shop around. “When introducing these measures, the FCA was clear that firms should be ready from April 2017.” He concluded: “We will continue to keep a close eye on the industry’s response to ensure firms are complying with the new rules and will take action where necessary.”