Insurance regulators in the United Kingdom have found some problems with several online insurance quote aggregators, raising concerns as to whether the companies responsible for these websites were treating customers fairly.
The Financial Services Authority has found instances of compliance failure with websites dealing in home and auto insurance. The regulatory group has been reviewing this particular sector of the insurance industry for several months now in an attempt to curtail fraud.
So far, 19 companies have been found as failing to adhere to regulatory rules. Investigators reportedly discovered failures to comply with rules as they pertain to arranging and advising on insurance. As a result, these companies could have put customers at significant financial risk.
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Online quote aggregators have been a popular option for insurance shoppers in the UK. Aggregators have enabled consumers to shop for insurance online, finding the cheapest coverage in a matter of seconds. This simple fact has slowed profits for insurers, particularly those specializing in car insurance, and has led to higher rates overall.
The FSA has raised concerns that such websites encourage consumers to fabricate false information in the attempt to obtain cheaper policies. This can put consumers at risk because the lack of accurate information could cause insurers to refuse to pay benefits.
The FSA has sent letters to the companies responsible for these websites. If the problems are not rectified in a timely manner, the FSA will take action.