BIBA welcomes the rule changes announced by the FCA today in its Policy Statement on residential multi-occupancy buildings. In particular, we welcome the introduction of the new policy stakeholder status for leaseholders and the increased transparency requirements around insurance arrangements and remuneration. The Statement coincides with extensive new work BIBA has commissioned to help members better demonstrate fair value for the activities and services they provide in this sector. This entails a new Fair Value Assessment Framework which members can adapt for their own business models to articulate, measure and evidence value for both the commission they retain and any commission they might share with freeholders and property managing agents (PMAs) for insurance related activities they undertake. It also coincides with a new member pledge that BIBA members are being asked to sign up to which makes important commitments around remuneration practices for residential buildings over 11m in height that have material fire safety issues. Finally, we are at an advanced stage in our work with the ABI and McGill & Partners to launch a new Fire Safety Reinsurance Facility later this year which will allow a group of leading insurers to deploy more risk capacity for medium and high-rise residential buildings that have material fire safety issues. The aim of this scheme is to reduce reliance on expensive excess of loss reinsurance placements which brokers need to purchase to ensure a building is fully insured and hence reduce the overall premium.
You can read a further detailed position paper developed by BIBA on the FCA’s policy statement and rule changes.