The Financial Conduct Authority (FCA) has admitted it is frustrated with the way fair value pricing assessments for insurance contracts have been conducted throughout the industry.
The regulator accepted the process has not worked how it was expecting and acknowledged it has fielded opposing complaints from advisers and providers about each other’s conduct.
Intermediaries attending the FCA Consumer Duty webinar noted the quality of product value assessments from manufacturers had been quite variable.
And they added that some providers have not met 30 September deadline which has made it difficult for distributors to complete their own value assessments.
FCA director of insurance Matt Brewis acknowledged there had been difficulties, but these had come from both sides of the industry.
“The process hasn’t quite worked in the way that I was expecting,” he said.
“We set out some of those concerns in a letter just before the summer that for many manufacturers they were taking the complete time allotted for that piece of work and not factoring in the work of the distribution chain.
“Equally we’ve had feedback around some of the other parts of the distribution chain which haven’t been as timely or thorough as manufacturers would expect.”
Brewis also emphasised the annual assessments were a permanent fixture as part of the Consumer Duty and so all parties needed to work together to find a way forward.
This included gathering views from around the industry and seeing if a greater level of standardisation could be achieved.
“It is incumbent on us to work with all of the industry to work out what’s worked well and what hasn’t through this so we can improve it for next year,” Brewis said.
“We’ve heard your feedback; we understand the frustration and there are parts of it that we’re slightly frustrated about as well.
“I’m hoping we will be able to provide greater clarity to the market before round two begins in earnest.”
