The Financial Conduct Authority’s (FCA) fair value product rules have come into force today.
The rules ensure that general insurance products, including health and protection policies, must be assessed to ensure they offer value to consumers. This includes those policies which originate from before October 2018.
The rules were introduced as part of the regulator’s policy statement published at the end of May overhauling pricing for general insurance and pure protection contracts, and followed the FCA’s general insurance pricing practices market study.
While policies renewed annually such as motor and home insurance will see the largest impacts on how they are priced, longer-term products such as protection cover are also affected along with medical, dental and health insurance products such as cash plans.
In June, Branko Bjelobaba, principal at consultancy Branko, told Health & Protection the rules would have far reaching implications for the sector.
And writing for Health & Protection in August, Regency Health managing director Brian Walters argued the changes threw down the gauntlet to the private medical insurance (PMI) sector where insurers can price clients out of the market.