We’ve responded to the Financial Conduct Authority’s consultation on simplifying the insurance rules.
We welcome the proposal for firms to determine the frequency of product reviews and support a risk-based approach that enables them to focus resources on products that pose a higher risk of harm. For Fair4All Finance, this means that products that are disproportionately accessed by or impact consumers in financially vulnerable circumstances should inherently be identified as high-risk and therefore subject to more frequent and rigorous reviews. This includes products that involve premium finance, which can contribute to the poverty premium. We believe the simplification of rules should help address the additional costs of paying monthly – including both the direct cost of premium finance and the indirect impact of how this payment method is treated as a risk factor in pricing decisions.
We also emphasise the importance of all firms in the value chain proactively identifying and addressing how their specific distribution models, partners and channels, such as price comparison websites, impacts the fair value experienced by consumers, especially those in financially vulnerable circumstances. Manufacturers should be strongly encouraged to share relevant fair value assessment data and insights with their distributors, and vice versa.
We strongly support the FCA’s aim to remove barriers to innovation and encourage firms to use this opportunity to develop more inclusive and accessible insurance products that directly meet the needs of underserved groups. This could include, for example, reframing products like contents insurance as accessible ‘possessions protection’ to improve value and consumer choice, especially for younger people and those in rented accommodation who are often least protected. We also put forward that firms should be explicitly encouraged to prioritise training that covers identifying and supporting customers in financially vulnerable circumstances, communicating clearly, and offering suitable products.
