The Financial Conduct Authority (FCA) does not believe proposals to reduce the value measures reporting requirements on insurers will create conflicts of interest.
The regulator has launched a consultation on dropping two requirements from the value measures for general insurance.
“The information being removed is not something we rely on when assessing firms’ business models or how they manage conflicts and so wouldn’t affect our supervision of firms,” an FCA spokesperson told Health & Protection.
The first rule the regulator wants to drop is stating the amount that the top 2% of claim pay-outs exceed.
The second is naming the five largest distribution agreements for each product.
It is the latter of the two which appears to leave insurers open to conflicts of interest, but the FCA is confident that this will not occur.
“We’re reviewing our value measures reporting requirements to make the data more consistent and useful, helping improve outcomes for consumers,” the spokesperson said.
“Firms will still have to meet all their existing obligations to identify, manage and prevent conflicts of interest.”
The proposal comes despite the FCA announcing in July that it is monitoring any conflict of interest among insurers.
At the time, the FCA said insurers should identify, prevent or manage such conflicts appropriately.
To improve transparency
The value measures for general insurance were introduced by the FCA in 2021 to improve transparency and help firms meet their fair value requirements.
Following a review, the regulator noted the two data points being targeted were not published and not used “widely in our supervisory work”.
The deadline for submitting comments to the FCA is October 9. A wider consultation is expected in the first half of 2027 before becoming mandatory in the 2028 reporting year.
Further changes to the rules could be proposed with the FCA’s spokesperson stating: “We expect to consult on further reforms next year.”
This was a theme mentioned in the consultation report: “Before we propose any wider changes, we are consulting on two minor standalone changes to reduce the reporting burden on firms without materially reducing the usefulness of the data.”