Further tweaks to the implementation of the Consumer Duty will be needed to help firms navigate “significant” issues connected to closed life insurance books, the Financial Conduct Authority (FCA) has admitted.
The regulator said that while firms have an additional year to deal with issues connected to closed books, it expects there will be “significant issues” with how firms reconcile old terms, conditions and approaches, legacy IT systems and how the duty is applied to old books.
FCA director of insurance Matt Brewis (pictured) told delegates at the Association of British Insurers annual conference: “I think there are issues that we’re going to have to deal with, that we’re going to have to work with you on.
“I don’t know what they are yet and so we’re really keen that as firms start to run up against some of these issues, you come and speak to us and we can work through those together, because there are going to be some areas where we are going to need some tweaks and we’ll need to think about it a lot as well.”
But looking ahead, Brewis added that he thought the Consumer Duty also presented a financial opportunity for firms.
“Companies that design products that people want, as opposed to those they have to have, they do better and they make more money,” he added.
“We want the insurance industry to succeed. I want it to be profitable and I want its customers better insured.
“And I think all of those can be achieved and Consumer Duty can help do that.”