The FCA is now looking into the selling strategies many insurers are using with add ons.
The Financial Conduct Authority (FCA) in the United Kingdom has made an insurance news announcement that it is investigating techniques being used by insurers for the sale of their products in order to increase their competitive powers.
The study is being conducted specifically into the practices surrounding the add ons in the industry.
The Chief Executive of the FCA, Martin Wheatley, first announced the insurance news at an industry conference that was held on Tuesday in London. The authority said that their investigation focused primarily on whether sales that are made to consumers – who are frequently offered additional coverage against any loss or breakage that occurs directly after the purchase of a new product – are actually offered any value for the money that they are spending.
This insurance news follows in line with the FCA’s efforts to avoid the repetition of the mis-selling scandal.
The Financial Services Authority (FSA) is continuing to deal with the disaster that came with the insurance news from the loan policy mis-selling scandal, and which has now cost the industry in the country nearly $13.4 billion. The FCA is a newly formed authority that is now looking into a number of different areas of the sector, including selling practices, to help to protect the United Kingdom’s industry from a recurrence.
The FCA is now focusing specifically on areas such as claims handling, mobile phone policies, and pricing applied to automatic policy renewals on auto and home coverage. Though outside of the FSA’s abilities, it is within the power of the FCA to be able to improve competition in an industry and to protect consumers through the changing or banning of products.
The insurance news announcement was made at the Association of British Insurers conference. There, Wheatley also said to delegates that “Our new competition duty is the single most significant change in our objectives as a regulator”. He added that “It means that we don’t just wait for problems before we try to promote competition in the markets we regulate.”