The Financial Conduct Authority (FCA) is writing to the bosses of life insurance firms to assess their treatment of customers in light of the cost of living crisis and the new Consumer Duty.
FCA director of insurance Matt Brewis confirmed the move during an Association of British Insurers webinar.
At the end of September, the regulator wrote to CEOs of general insurance firms telling them to ensure their customers were protected from unnecessary products or add-ons and unfair penalties.
In his address to delegates, Brewis revealed the regulator will be sending a similar letter to the CEOs of life insurance firms over the next couple of weeks.
Brewis revealed the letter will focus on the on the current cost of living crisis and its juxtaposition with the new Consumer Duty.
“In it we focus on those questions – what are you doing to ensure the fair treatment of vulnerable customers?” Brewis said.
“Are your call centres clear as to how they are looking after those people – especially those who are vulnerable because of their financial position at the moment? Are you proposing products that meet your customers’ demands and needs?
“This is really basic – something that has been a rule for a considerable period of time. But again as people’s demands and needs change, potentially the need for being able to afford less than they previously could, how can you help them meet those needs?
“And are you providing customers with the information they need to make difficult decisions about how they manage their insurance costs and saving commitments in the face of these financial constraints?”
Brewis added the letter will also focus on claims handling and whether firms are handling claims promptly and fairly.
“It’s one of those areas where we spend a lot of time talking about inception of products,” Brewis continued.
“But with the new Consumer Duty, we’re not just focused on the time of purchase but the whole lifecycle and how customers are treated throughout the lifecycle of the product.
“When people come to claim, they’re claiming because they need to because of some unexpected event occurring, how can you help them ensure that those issues are rectified, and they have their claim paid as promptly and fully as they would expect.”