The FCA has published a ‘Dear Board of Directors’ letter sent to personal and commercial line insurers (PL&CL) on 25 August. This follows a letter of a similar nature sent in January 2020. In this present letter, the FCA covers the following topics:
- An updated view of the key risks of harm PL&CL insurers pose.
- Outline our expectations of PL&CL insurers.
- An overview of our supervisory strategy and programme of work to ensure that firms are meeting our expectations, and harms are being appropriately remedied.
In regards to the key drivers of harm (or risks posed by PL&CL insurers), the FCA highlights the following areas (whilst also explaining its supervisory strategy and expectations in respect of these areas):
- Poor pricing;
- Consumers purchasing products that are not fair value;
- Consumers experience of poor service due to ineffective oversight of the value chain;
- Business interruption claims payments are not made in a timely manner and in line with the BI Insurance test case judgment
- Firms’ operational resilience does not prevent the loss or misuse of consumer data or results in consumers not having access to key services
To view a copy of the letter, please click here.