The Financial Conduct Authority (FCA) has not found evidence of significant levels of harm to competition in the wholesale insurance broker sector to merit the introduction of intrusive remedial measures. As a consequence, it is closing its market study and issuing a final report.
Overall the FCA has not found evidence of significant levels of harm to competition that would merit particular remedy. Where the FCA has identified problems, it believes concerns can be addressed with its usual supervisory processes where appropriate.
In November 2017, the FCA published terms of reference for a market study in response to evidence heard of potential competition concerns in the wholesale broker market.
The FCA has, however, identified some concerns that warrant further action, in relation to:
- conflicts of interest, for example where higher remuneration might incentivise a broker to use a facility where it might not be in their client’s best interest;
- poor or inadequate information disclosed to clients, for example policies setting out conflicts at a high level without details of how such conflicts can be mitigated; and
- certain specific contractual agreements between brokers and insurers where some clauses restrict competition.
- View: The FCA has today published the results of its market study on the wholesale broker market