Regulation Updates – British Insurance Brokers' Association https://www.biba.org.uk The British Insurance Brokers' Association is the UK's leading general insurance intermediary organisation Thu, 06 Dec 2018 15:07:07 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 154303522 FCA publishes website guidance on delivering fair outcomes to customers after IDD implementation https://www.biba.org.uk/latest-news/fca-publishes-website-guidance-on-delivering-fair-outcomes-to-customers-after-idd-implementation/ Thu, 06 Dec 2018 11:03:57 +0000 https://www.biba.org.uk/?p=31318 The Financial Conduct Authority (FCA) has published a new online guidance page about delivering clear and fair outcomes to customers in the insurance sector following

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The Financial Conduct Authority (FCA) has published a new online guidance page about delivering clear and fair outcomes to customers in the insurance sector following the introduction of the Insurance Distribution Directive (IDD) on 1 October 2018.

The page draws together various requirements in the FCA’s Handbook that apply to firms distributing insurance and sets out some of the regulator’s expectations about how its rules should be applied, these include: demands and needs requirements; the product oversight and governance rules (PROD) which apply to the manufacture and distribution of insurance; and the customer’s best interest rule.

Members may access the guidance by clicking here.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

 

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FSCS warns of supplemental levy on the retail pool as pension claims soar https://www.biba.org.uk/latest-news/fscs-warns-of-supplemental-levy-on-the-retail-pool-as-pension-claims-soar/ Wed, 05 Dec 2018 10:25:16 +0000 https://www.biba.org.uk/?p=31305 The Financial Services Compensation Scheme (FSCS) has published the January 2018 edition of its Outlook industry newsletter, which provides an update about its experience so

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The Financial Services Compensation Scheme (FSCS) has published the January 2018 edition of its Outlook industry newsletter, which provides an update about its experience so far this year and the prospects for what remains of 2018/19 levy year. Members may access the publication by clicking here

Mark Neale, CEO of the FSCS, said in his introduction to the newsletter that the foreground was dominated by the continuing growth in pensions claims.  Neale noted: “Despite raising a levy on life and pensions advisers in April of £75 million – the maximum allowable for nine months from June 2018 to March 2019 – we expect a deficit by year end of just under £70 million.  This will, I am afraid, necessitate a supplementary levy falling on the retail pool.”

BIBA flagged to its members in a regulatory update from January 2018 the likelihood of a supplementary levy being raised which would have the unfortunate effect of triggering a cross subsidy to be paid by the FCA retail pool.  This subsidy is shared across all categories of firms, including the general insurance intermediation class (SB02), which as the class with the highest number of participants contributes 32% to the retail pool.

The FSCS has since advised BIBA that the SB02 class’s contribution to the retail pool would likely be in the region of £21 million.  This would be partly funded by a class surplus of £8 million, which had built up as a result of receiving fewer than expected PPI claims from the Financial Conduct Authority’s ‘Schwarzenegger’ advertising campaign, leaving an additional supplementary levy of around £13 million to be collected.

The FSCS said it will announce the size of the supplementary levy in January 2019 when it publishes a consultation on its plan and budget.

The 20181/19 levy was for nine months only so as to align the FSCS’s financial year with that of the Financial Conduct Authority and the Financial Ombudsman Service.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA publishes second consultation relating to Handbook changes arising from Brexit https://www.biba.org.uk/latest-news/fca-publishes-second-consultation-relating-to-handbook-changes-arising-from-brexit/ Tue, 27 Nov 2018 11:12:45 +0000 https://www.biba.org.uk/?p=31272 The Financial Conduct Authority (FCA) has published a further consultation about its approach to the UK’s exit from the EU.  Consultation paper 18/36 (CP18/36), which

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The Financial Conduct Authority (FCA) has published a further consultation about its approach to the UK’s exit from the EU.  Consultation paper 18/36 (CP18/36), which is entitled Brexit: proposed changes to the Handbook and Binding Technical Standards – second consultation, sets out additional proposals to prepare for the possibility the UK leaves the European Union on 29 March 2019 without an implementation period.  Members may access CP18/36 by clicking here.

This consultation paper principally focuses on a range of Handbook and BTS amendments which were not included in the FCA’s earlier consultation papers (CP18/28 and CP18/29) that were issued in October.  It also consults on:

  • further amendments to the Handbook regarding the Temporary Permissions regime;
  • amendments to the Handbook to reflect the new Credit Rating Agency and Trade Repository regimes; and
  • the regulator’s approach to non-Handbook guidance and its approach to forms that appear in the Handbook.

The FCA is not proposing any policy changes unrelated to Brexit in this consultation paper.

The consultation is open until 21 December 2018.  Responses can be submitted via the FCA’s online form, by email or in writing.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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2018/122 DXC Disaster Recovery Test – Friday 23 November to Sunday 25 November 2018 https://www.biba.org.uk/regulation-updates/2018-122-dxc-disaster-recovery-test-friday-23-november-to-sunday-25-november-2018/ Thu, 08 Nov 2018 13:47:02 +0000 https://www.biba.org.uk/?p=31159 The post 2018/122 DXC Disaster Recovery Test – Friday 23 November to Sunday 25 November 2018 appeared first on British Insurance Brokers' Association.

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FCA proposals zero in on pricing practices in retail GI markets https://www.biba.org.uk/latest-news/fca-proposals-zero-in-on-pricing-practices-in-retail-gi-markets/ Wed, 31 Oct 2018 13:32:50 +0000 https://www.biba.org.uk/?p=31076 The Financial Conduct Authority (FCA) is to press ahead with a package of measures which is believes are necessary to ensure that retail general insurance

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The Financial Conduct Authority (FCA) is to press ahead with a package of measures which is believes are necessary to ensure that retail general insurance markets deliver competitive and fair prices for consumers.  The regulator had indicated in its 2018/2019 Business Plan that it would conclude a piece of supervisory work on general insurance (GI) pricing practices.

Central to that supervisory work has been the publication of the findings of a thematic review (TR18/4) of household insurance pricing practices.  The report sets out the FCA’s key findings, its planned actions and next steps alongside its expectations of firms.  Alongside this, the regulator also published it terms of reference (ToR) for a market study into retail home and motor insurance as well as a discussion paper on fair pricing in financial services.

The FCA said that it had identified the following issues, in a sample of 18 firms, during the course of its thematic review:

  • Firms not having appropriate and effective strategies, governance, control and oversight of their pricing practices and activities, such that they are unable to reliably assess and evidence whether they are treating their customers fairly.
  • Differential pricing leading to some identifiable groups of consumers paying significantly higher prices than other identifiable groups of consumers with similar risk and cost to serve characteristics.
  • The risk of discriminating against consumers through using rating factors in pricing based (directly or indirectly) on data (including third party data) relating to or derived from protected characteristics.

The regulator expressed its concerns in TR18/4 about the potential harm that the issues identified in the review can cause to long-standing consumers, particularly those who are vulnerable.  It set out its expectations of firms that they should take reasonable care to establish and maintain such systems and controls as are appropriate to their business.  This included considering their pricing activities and whether the governance, systems and controls over these activities are sufficient to ensure that customers are being treated fairly.  Andrew Bailey, CEO of the FCA, also wrote a Dear CEO letter to the heads of GI firms undertaking pricing activities urging them ‘to act now to address any issues from the findings in our report which apply to your firm.’

The FCA acknowledged the steps the GI insurance industry is taking to address concerns about pricing practices.  BIBA and the Association of British Insurers published Guiding Principles and Action Points for GI Pricing in May 2018, which are aimed at tackling excessive premium differences between long standing and new customers.  This was in addition to an earlier joint Code of Good Practice designed to help the industry recognise and assist potentially vulnerable customers, who may need extra support when renewing motor and home insurance policies.  The FCA said that it expected industry to continue the work underway while it conducted its programme of work.

 

The findings of the thematic review were such that the FCA concluded that a market study (MS18/1looking at general insurance pricing practices for retail home and motor business is necessary.  The regulator published the ToR for the study which will examine whether pricing practices for home and motor insurance lead to consumer harm and, if so, who is affected and what action, if any, the FCA needs to take to address the harm and make the market work well for consumers.

The FCA hopes that the market study will deepen its understanding of the following areas:

  • Consumer outcomes from pricing practices and what drives this;
  • The fairness of pricing practices; and
  • The impact of pricing practices on competition.

Alongside the market study, the FCA published discussion paper 18/09 (DP18/09) about fair pricing in financial services markets.  Members may click here to access the discussion paper.

The DP sets out the FCA’s approach to considering fairness of pricing in general and aims to generate a public debate around certain practices.  The FCA wants to hear views from stakeholders to inform the judgment of when pricing is unfair in financial services markets.  These views will be important for informing the market study.

These pricing practices have also attracted considerable public interest.  Citizens Advice issued a super-complaint to the Competition and Markets Authority (CMA) on 28 September about excessive prices for disengaged consumers in cash savings, mortgage, home insurance, broadband and mobile markets.  Citizens Advice refer to this practice as a ‘loyalty penalty’. The CMA has 90 days in which to consider the concerns raised and issue a response about possible outcomes to resolve them.  This will include engagement with relevant regulators such as the FCA and Ofcom.

 

Give the FCA and BIBA your views

The FCA said that it would welcome views and evidence on the questions posed in the ToR for the market study by 3 December 2018.  The regulator is planning to publish its interim market study report, where appropriate with discussion of potential remedies, in the summer of 2019.  Publication of the final market study report is planned the end of 2019.

The FCA said that any views on the questions in its discussion paper about fair pricing in financial services should be received by 31 January 2019.

BIBA will be submitting an official response to the FCA about the market study and the discussion paper as well as holding ongoing discussions with the regulator about its work in this area.  BIBA members who would like their views to be considered as part of this process should send them to David Sparkes at sparkesd@biba.org.uk by the following dates:

  • Monday 26 November for the market study ToR.
  • Thursday 24 January for the discussion paper about fair pricing.

Free FCA webinar

The FCA is also holding a webinar explaining what the GI market study is about and how firms can navigate their way through one on Thursday 8 November at 11.30am.  The live webinar will run for an hour and will outline the areas that the FCA will be looking at as well as provide an opportunity for firms to ask questions.  Members who would like to participate in the webinar can register here. 

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA confirms delay in publishing interim report in Wholesale Insurance Brokers’ Market study https://www.biba.org.uk/latest-news/fca-wholesale-broker-report/ Tue, 23 Oct 2018 09:04:13 +0000 https://www.biba.org.uk/?p=31056 The Financial Conduct Authority (FCA) has confirmed that it will be delaying publication of the interim report from its Wholesale Insurance Brokers Market study.  The

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The Financial Conduct Authority (FCA) has confirmed that it will be delaying publication of the interim report from its Wholesale Insurance Brokers Market study.  The FCA advised the British Insurance Brokers’ Association that as a consequence of industry feedback, which had expressed concerns about the proposed timing of the report and its impact on market participants, the regulator had decided to delay publication from December 2018 until late January/early February 2019.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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Y5213 – Lloyd’s Brussels – New Crystal content, Stamp Decision Tool and policy documentation templates https://www.biba.org.uk/regulation-updates/y5213-lloyds-brussels-new-crystal-content-stamp-decision-tool-and-policy-documentation-templates/ Thu, 18 Oct 2018 13:04:25 +0000 https://www.biba.org.uk/?p=31050 The post Y5213 – Lloyd’s Brussels – New Crystal content, Stamp Decision Tool and policy documentation templates appeared first on British Insurance Brokers' Association.

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SME access to FOS widened https://www.biba.org.uk/latest-news/sme-access-to-financial-ombudsman-service-widened-and-award-limits-set-for-increase/ Tue, 16 Oct 2018 15:19:55 +0000 https://www.biba.org.uk/?p=31033 The Financial Conduct Authority (FCA) has confirmed plans to allow more small and medium enterprises (SMEs) to access the Financial Ombudsman Service (FOS).  Policy Statement

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The Financial Conduct Authority (FCA) has confirmed plans to allow more small and medium enterprises (SMEs) to access the Financial Ombudsman Service (FOS).  Policy Statement 18/21 sets out the near final rules which will mean an additional 210,000 UK SMEs will be eligible to seek redress from the ombudsman service with a provisional start date of 1 April 2019.  Members may click here to access PS18/21.

Policy Statement 18/21 (PS18/21) provides feedback on CP18/3 which sought to extend access to the FOS to larger SMEs, charities and trusts, and a new category of personal guarantors.  The criteria for access to FOS have been amended from that set out in CP18/3 so that SMEs must only meet the turnover test and one of either the headcount or balance sheet total tests, not all three tests as previously proposed.  The FCA made this change in response to feedback that applying all three tests would unfairly exclude certain types of SME, for example those with relatively low turnover but 50 or more employees.

The changes will mean that SMEs with an annual turnover below £6.5 million and fewer than 50 employees, or an annual balance sheet below £5 million will now be able to refer unresolved complaints to the FOS.

The FCA said that it was publishing near?final rules now in order to give the FOS the degree of certainty it needs to take reasonable, concrete steps in order to implement the proposals.  These steps included hiring any extra staff and consultants with the necessary skills and expertise that the FOS feels are appropriate.

The FCA published alongside the near-final rules Consultation Paper 18/31 (CP18/31) which proposes to raise the maximum amount of compensation the FOS can require financial services firms to pay out from £150,000 to £350,000.  Members may access CP18/31 by clicking here.

It is proposed in CP18/31 that on 1 April 2019, the ombudsman service’s £150,000 award limit should change to:

  • £350,000 for complaints about acts or omissions by firms on or after 1 April 2019.
  • £160,000 for complaints about acts or omissions by firms before 1 April 2019, and which are referred to the FOS after that date.

It is also proposed that, from 1 April 2020 onwards, both award limits should be automatically adjusted on 1 April to ensure they keep pace with inflation, as measured by the Consumer Prices Index (CPI).  For any complaints referred to the FOS before 1 April 2019 the limit will remain at £150,000.

The consultation period for CP18/31 closes on 21 December 2018.  The FCA will then consider feedback and intends to publish final rules in a policy statement in early March 2019.

Responses can be submitted via the FCA’s online form, by email or in writing.  BIBA will be submitting an official response to the consultation.  Should any member wish their views to be considered as part of this process, please send them to David Sparkes at sparkesd@biba.org.uk by close of business on Friday 7 December.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk

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FCA draft guidance around Statements of Responsibilities and mapping in new SM&CR regime https://www.biba.org.uk/latest-news/fca-published-draft-guidance-around-statements-of-responsibilities-and-mapping-in-new-smcr-regime/ Tue, 16 Oct 2018 13:29:13 +0000 https://www.biba.org.uk/?p=31031 The Financial Conduct Authority (FCA) has proposed guidance about statements of responsibilities and responsibilities maps for FCA solo-regulated firms under the incoming Senior Managers &

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The Financial Conduct Authority (FCA) has proposed guidance about statements of responsibilities and responsibilities maps for FCA solo-regulated firms under the incoming Senior Managers & Certification Regime (SM&CR).  Members may access the proposed guidance by clicking here.

Under the SM&CR, all Senior Managers must have a statement of responsibilities (SoR).  In addition, all firms that fall into the enhanced category of the new regime must have a Responsibilities Map.

The proposed guidance sets out the purpose of SoRs and Responsibilities Maps, provides some questions for firms to ask themselves and outlines examples of good and poor practice.  It is designed to be read alongside the Guide for FCA solo-regulated firms  as well as applicable rules and guidance in the FCA Handbook.

References in in GC18/04 to rules and guidance are based on the near-final rules published in PS18/14 and Handbook text.   The FCA reminded firms that the proposed guidance is not a substitute for reading the relevant Handbook sections, but that it has provided cross-references to where further information can be found wherever possible.

The FCA is consulting on proposed guidance in Chapters 2 and 3 GC18/4.  Questions can be found in Annex I of the document and these should be submitted to the FCA by 10 December 2018.

Responses can be submitted via the FCA’s online form, by email or in writing.  BIBA will be submitting an official response to the consultation.  Should any member wish their views to be considered as part of this process, please send them to David Sparkes at sparkesd@biba.org.uk by close of business on Friday 30 November.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA sets out its plans for its Temporary Permissions Regime after Brexit https://www.biba.org.uk/latest-news/fca-sets-out-its-plans-for-its-temporary-permissions-regime-after-brexit/ Tue, 16 Oct 2018 08:56:51 +0000 https://www.biba.org.uk/?p=31016 The Financial Conduct Authority (FCA) has published two consultation papers, setting out its proposals in the event the UK leaves the European Union on 29

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The Financial Conduct Authority (FCA) has published two consultation papers, setting out its proposals in the event the UK leaves the European Union on 29 March 2019 without an implementation period.

Amendments to Handbook and Binding Technical Standards (BTS)

Parliament has passed the European Union (Withdrawal) Act 2018 to prepare the UK’s legal framework for exiting the EU.  It will convert existing directly applicable EU law at the point of exit into UK law, preserve existing UK laws which implement EU obligations, and give the Government powers to amend that law so it functions effectively when the UK leaves the EU. As part of these preparations, the Treasury intends to give financial services regulators, including the FCA, responsibility for amending EU binding technical standards (BTS), which are detailed EU rules, for exit day.

Consultation paper 18/28 (CP18/28)  https://www.fca.org.uk/publication/consultation/cp18-28.pdf proposes changes that may need to be made to the FCA Handbook and BTS, while setting out the FCA’s approach after Brexit to EU non-legislative material.  The majority of the changes are consequential to those proposed by the Government under the European Union (Withdrawal) Act 2018.  For example, changes include removing references to EU institutions, such as the European Commission or the European Supervisory Authorities, which will be replaced with the relevant UK equivalent.  In a small number of cases, the FCA is proposing other types of changes that reflect the UK’s new position outside of the EU. Feedback is invited on the approach taken to all of the amendments.  The FCA is not proposing policy changes unrelated to Brexit.

Temporary Permissions Regime

The FCA is also consulting on its proposals for the Temporary Permissions Regime (TPR) for inbound firms and funds in consultation paper 18/29 (CP18/29) https://www.fca.org.uk/publication/consultation/cp18-29.pdf.  At present, certain European Economic Area (EEA) firms can provide financial services in or into the UK, and EEA investment funds can be marketed in the UK, through a passport.  The paper sets out how EEA firms and investment funds can continue to carry on regulated business in or into the UK for a limited period after Brexit while seeking full authorisation in the UK. The regime will only be available from 29 March 2019 if the UK leaves the EU without an implementation period.

The consultation paper sets out details of how the FCA expects the regime to work in practice, how firms and investment funds can enter into it, how long it will operate for, and the rules it proposes that should apply to firms and investment funds while they are part of it.

In essence, inbound firms and investment funds will need to notify the FCA that they want a temporary permission.  That notification is expected to be an online process using the FCA’s Connect system.  Following exit day, the FCA will allocate each firm a three month application period or ‘landing slot’ when it will need to submit its application for full authorisation in the UK.

Firms that passport into the UK and have a top-up permission will also need to notify the FCA via Connect that they want to use the TPR to ensure that the part of their permission which relies on passporting continues. Such firms will need to submit a Variation of Permissions (VoP) application rather than an application for authorisation.

The FCA expects that firms will generally be given a landing slot based on the type of business undertaken.

The FCA is anticipating that the first landing slot will be October to December 2019 followed by a further five landing slots with the last landing slot closing at the end of March 2021.

With regards to failing to apply for authorisation, withdrawing an application and unsuccessful applications.  Where a firm’s application for full authorisation (or application for variation if it has a top-up permission) is refused, the firm’s temporary permission will come to an end automatically based on the FCA decision notice.

The FCA said that it had taken a proportionate approach to enable firms to comply with its requirements from day one.  Overall, the FCA’s aim is to preserve existing arrangements as far as possible for both firms and consumers.  In some cases, firms may be required to join additional schemes run by UK institutions to protect UK consumers, for example the Financial Services Compensation Scheme.

Both consultations are open until Friday 7 December 2018.  Responses can be submitted via the FCA’s online form, by email or in writing.  BIBA will be submitting an official response to the consultations.  Should any member wish their views to be considered as part of this process, please send them to David Sparkes at sparkesd@biba.org.uk by close of business on Friday 23 November.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

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Xchanging Market Communication – 2018/120 Claims Services Major Casualty/Catastrophe Codes 18J https://www.biba.org.uk/regulation-updates/xchanging-market-communication-2018-120-claims-services-major-casualty-catastrophe-codes-18j/ Thu, 11 Oct 2018 10:00:49 +0000 https://www.biba.org.uk/?p=30996 The post Xchanging Market Communication – 2018/120 Claims Services Major Casualty/Catastrophe Codes 18J appeared first on British Insurance Brokers' Association.

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FCA told hold third pilot in its GI value measures initiative https://www.biba.org.uk/latest-news/fca-told-hold-third-pilot-in-its-gi-value-measures-initiative/ Wed, 19 Sep 2018 09:21:21 +0000 https://www.biba.org.uk/?p=30870 The Financial Conduct Authority (FCA has updated its value measures webpage setting out the next steps in the process.  Members may access the webpage by

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The Financial Conduct Authority (FCA has updated its value measures webpage setting out the next steps in the process.  Members may access the webpage by clicking here.

The FCA said that following the success of its second pilot, it has decided to collect a third set of data so that it can continue to monitor how the market is changing and its response to the published data.  This third set of value measures data will be across three measures: claims frequency; claims acceptance rates; and average claims payout.  The general insurance products included are: Home (combined buildings and contents); Home emergency insurance; Personal accident insurance sold as an add-on to motor or home insurance; and Key cover sold as an add-on to motor insurance

The FCA also intends to consult on rules requiring the regular reporting of general insurance value measures data by firms to it.  This will extend the scope of value measures across a wider range of general insurance products and to all relevant general insurance firms.  Collecting a third set of value measures data will help inform that consultation, which the FCA is intending to publish in 2019.

BIBA welcomes the FCA’s decision to hold a third pilot study, this had been a key recommendation of its Regulatory Working Group.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

 

 

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Y5207 – Australian Financial Complaints Authority https://www.biba.org.uk/regulation-updates/y5207-australian-financial-complaints-authority/ Tue, 18 Sep 2018 09:09:37 +0000 https://www.biba.org.uk/?p=30859 The post Y5207 – Australian Financial Complaints Authority appeared first on British Insurance Brokers' Association.

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Final interactive version of Insurance Market Core Uses Information Notice now available https://www.biba.org.uk/latest-news/final-interactive-version-of-insurance-market-core-uses-information-notice-now-available/ Fri, 07 Sep 2018 09:25:35 +0000 https://www.biba.org.uk/?p=30827 An interactive version of the joint industry Insurance Market Core Information Uses Notice has now been finalised and published on the London Market Group’s website. 

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An interactive version of the joint industry Insurance Market Core Information Uses Notice has now been finalised and published on the London Market Group’s website.  Changes to the design and functionality of the Notice mean that it is easier to navigate around now and much more user-friendly.

It is hoped that widespread use of the Notice, alongside a firm’s own privacy notice, will assist in educating consumers consistently about how their personal data is used in core processes throughout the insurance lifecycle and thereby support each firm’s own efforts to meet their data protection obligations.

Members may access the document by clicking here.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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HM Treasury’s annual Frozen Assets Review launched https://www.biba.org.uk/latest-news/hm-treasurys-annual-frozen-assets-review-launched/ Tue, 04 Sep 2018 10:52:40 +0000 https://www.biba.org.uk/?p=30804 HM Treasury has launched its annual review of frozen assets belonging to individuals who have been targeted under UK, UN, or EU law for financial

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HM Treasury has launched its annual review of frozen assets belonging to individuals who have been targeted under UK, UN, or EU law for financial sanctions.  As in previous years, all individuals, organisations and businesses holding frozen assets will have until Friday 12 October 2018 to report them to the Treasury’s Office of Financial Sanctions Implementation (OFSI).  Members should use the form at the link below to report:

https://www.gov.uk/government/organisations/office-of-financial-sanctions-implementation

Taking part in the exercise will help ensure that HMT has as comprehensive a return as possible of all frozen assets, something that helps them to ensure that financial sanctions remain an effective foreign policy and national security tool.

The annual review also serves as a helpful reminder that members need to comply with financial sanctions in place in the UK and to report frozen assets and other relevant information to OFSI immediately.

Frozen funds cannot be accessed except under the authority of HM Treasury, the competent authority for the implementation and enforcement of financial sanctions in the UK. Where an asset freeze is in place, it is a criminal offence to release the frozen funds or deal with them without a licence from OFSI.

OFSI will only consider licensing the release of frozen funds if the activity falls within the licensing grounds available in the legislation. OFSI’s policy is to preserve the value of misappropriated government assets and it takes this into consideration when applying the EU and UK sanctions regime licensing grounds.

More information on financial sanctions can be found in OFSI’s guide to financial sanctions:

https://www.gov.uk/government/publications/financial-sanctions-faqs

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

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FCA emphasises its expectations around brokers’ due diligence on insurers https://www.biba.org.uk/regulation-updates/fca-emphasises-its-expectations-around-brokers-due-diligence-on-insurers/ Wed, 22 Aug 2018 09:08:50 +0000 https://www.biba.org.uk/?p=30761 The Financial Conduct Authority (FCA) has published a new page on its website about brokers’ due diligence on insurers.  The page sets out the FCA’s

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The Financial Conduct Authority (FCA) has published a new page on its website about brokers’ due diligence on insurers.  The page sets out the FCA’s expectations that brokers are able to demonstrate that they have carefully considered the insurers that they place their customers’ business with.  The move follows in the wake of recent failures at Alpha Insurance A/S, Enterprise and Gable, the collapse of which demonstrated the harm and market disruption caused when around 1 million customers needed to find alternative insurance cover.  Ensuring relevant markets work well and that consumers receive an appropriate degree of protection are key objectives for the FCA.

The FCA noted: ‘Suitable due diligence is a key part of the process that we expect insurance brokers to perform on the insurance companies they use.’  It also added that brokers should be comfortable that they are placing their customers’ business with an insurer where they themselves would be happy to be a policyholder.

Members may access the web page by clicking here.

The new web page is a slimmed down and updated version of the article that the FCA wrote for BIBA’s Compliance Rules publication last year.  Members may access the publication by clicking here.

The page goes on to list examples of due diligence that brokers can undertake when deciding which insurer to place a risk with.  The examples include the BIBA Litmus Test Report which is an online facility for members that will help with their due diligence when considering whether to use unrated non-life insurers. The facility was designed with the analytical support of Litmus Analysis and uses data from AM Best to present a number of key financial ratios for a number of unrated insurers most often used by BIBA members.  Members can access more information about the facility by clicking here.

Members should also be aware of the FCA’s pledge to do further work in this area to verify that insurance brokers are conducting appropriate due diligence on the insurers they use.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

 

 

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FSCS reports good news for policyholders who had Guaranteed Asset Protection (GAP) cover with Alpha Insurance https://www.biba.org.uk/latest-news/fscs-reports-good-news-for-policyholders-who-had-guaranteed-asset-protection-gap-cover-with-alpha-insurance/ Mon, 20 Aug 2018 09:50:17 +0000 https://www.biba.org.uk/?p=30742 The Financial Services Compensation Scheme (FSCS) has made further progress to assist customers of Alpha Insurance A/S of Denmark which was declared in default on

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The Financial Services Compensation Scheme (FSCS) has made further progress to assist customers of Alpha Insurance A/S of Denmark which was declared in default on 8 May 2018.  The FSCS has been working closely with the liquidator, as well as the Danish Guarantee Fund and Premia Solutions to secure alternative insurance cover for eligible customers, following Alpha’s demise.

FSCS said in a statement that it had worked with Premia Solutions to replace 177,000 guaranteed asset protection (GAP) policies with effect from 12 August 2018.  The new insurer will be a Lloyd’s of London syndicate.

Affected policy holders will receive a letter from Premia Solutions outlining the details of the transfer of their policies.  The transfer comes after Alpha’s liquidator gave notice that these policies will be cancelled on 11 August 2018.

For more specific information about Alpha can be found by clicking here.

The FSCS reiterated the importance of brokers making their return of premium claims via an online form on Alpha Insurance’s website during its discussions with BIBA.  Going via the online portal will allow brokers’ data to be reconciled with insurers’ policy records and improve the efficiency of the claims process.  The online portal can be accessed by clicking here. 

Please go to the link and follow the instructions.

The FSCS is due to visit the Danish Guarantee Fund again next week (w/c 20 August 2018).  Should BIBA members have any comments about their experience (good and bad) of using the online portal they should contact David Sparkes at sparkesd@biba.org.uk as soon as possible so that we may feedback to the FSCS ahead of their visit.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA launches tool to aid root cause analysis of complaints process https://www.biba.org.uk/latest-news/fca-launches-tool-to-aid-root-cause-analysis-of-complaints-process/ Mon, 20 Aug 2018 09:45:29 +0000 https://www.biba.org.uk/?p=30740 The Financial Conduct Authority (FCA) has published a hypothetical case study about complaints handling including root cause analysis.  This is a tool to help firms when reviewing

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The Financial Conduct Authority (FCA) has published a hypothetical case study about complaints handling including root cause analysis.  This is a tool to help firms when reviewing and amending their complaint handling policies and procedures, particularly with understanding what good root cause analysis can look like.

The FCA said that although the case study uses a retail lending example, it may be helpful for other firm types to better understand what a good complaints process, including root cause analysis, can look like.

The hypothetical case study follows multi-firm workinto complaints handling where the FCA discovered that some firms did not conduct adequate complaints root cause analysis.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA asks firms to keep sharing Brexit contingency plans https://www.biba.org.uk/regulation-updates/fca-brexit-plans-share/ Thu, 09 Aug 2018 07:54:51 +0000 https://www.biba.org.uk/?p=30685 The FCA has written to firms asking them to keep the FCA ‘in the loop’ when it comes to Brexit planning. In a ‘Dear CEO’

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The FCA has written to firms asking them to keep the FCA ‘in the loop’ when it comes to Brexit planning.

In a ‘Dear CEO’ letter, the FCA has stated that it needs to ensure that it can continue to supervise the conduct of firms’ UK businesses effectively, so asks to be consulted before firms takes any decisions on the structures they intend to put in place elsewhere in Europe.

Seemingly aimed predominantly at banks and the how and where they book transactions (called booking models in the letter), there is a read-across to all firms and to which entity’s Profit and Loss (P&L) account a transaction is recorded.

Members can read the FCA letter here.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA says its intervention in GAP add-ons market has more than doubled shopping around https://www.biba.org.uk/latest-news/fca-says-its-intervention-in-gap-add-ons-market-has-more-than-doubled-shopping-around/ Tue, 31 Jul 2018 13:47:32 +0000 https://www.biba.org.uk/?p=30610 The Financial Conduct Authority (FCA) has published a paper evaluating its intervention in the add-on guaranteed asset protection (GAP) insurance market which the regulator launched

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The Financial Conduct Authority (FCA) has published a paper evaluating its intervention in the add-on guaranteed asset protection (GAP) insurance market which the regulator launched in September 2015. The FCA introduced two measures relating to the sale of GAP add-ons in order to address harm identified during a wider general insurance add-ons market study. Members may access the document by clicking here.

The measures introduced included vehicle sellers being required to provide better information to consumers and a pause in the sales process. The FCA argued that these measures together (time and information) would enable consumers to better assess whether they need GAP insurance and to shop around if they do.
Evaluation Paper 18/1 sets out the findings of the FCA’s test of the post-intervention effectiveness of its remedies in the GAP insurance market. Overall, the FCA found that its intervention had had a positive impact with more consumers engaging in the decision-making process and shopping around more than doubling.
The FCA said that its intervention had achieved its objectives, although not by as much as it had expected. Due to intervention, the FCA expected that:

• add-on sales would be up to 32.5% lower, they were found to be 16%-23% lower.
• the share of sales of standalone would increase to up to 40%, whereas its market share was found to have increased to 8% from 6%.
• add-on prices would be up to 17% lower, with the price differential between add-on and standalone narrowing. Prices were found to be 2-3% lower.

In particular, the impact on the standalone’s share of total sales and on add-on prices has been much less pronounced than it expected, the FCA noted.
The regulator said that its intervention had helped to reduce ‘considerable harm in the market’. It estimated that there were around £26 million to £28 million of ongoing consumer benefits a year after the intervention. This exceeded firms’ total costs of implementing the intervention, including a one-off cost of £5 million to £8 million and an ongoing cost of £1 million a year.
FCA said it had identified some lessons that it can apply to current and future work.

Views are invited on the evaluation paper. These can be sent to the FCA by email at evaluationpapers@fca.org.uk
or in writing to: Economic and Financial Analysis Department, Strategy & Competition Division, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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