FCA announces radical proposals to shake up premium pricing in GI market to improve competition for customers

We know that the regulator has long been concerned about different (and lower) premiums been offered to new customers compared to loyal customers who may not shop around for their insurances (the so called “loyalty penalty”). The FCA says that its work in the area has identified 6 million policyholders paying high or very high margins in 2018, where if they had paid the average for their insured risk they could have saved £1.2 billion.

FCA

Continue Reading

Win for FCA and some relief for policyholders in High Court BI insurance test case

The High Court ruled yesterday in favour of the Financial Conduct Authority (“FCA“) on what the FCA describes as the “majority of the key issues” in its test case on insurance cover for business interruption (“BI“) losses incurred during the COVID-19  pandemic and subsequent Government imposed lockdown.

The decision means that insurers may now have to pay out on hundreds of thousands of BI claims to businesses that previously had their claims declined by insurers.

But some commentators have warned that it may still take some time for policyholders to get their claim money. There is the prospect of an appeal by the insurers in the test case, possibly directly to the Supreme Court. And that could take months even if the process was expedited. We wait to see whether, in the meantime, the FCA might intervene and order insurers to make interim payments to policyholders whilst any appeal proceeds.

Judge holding gavel in courtroom

Continue Reading

Insurers in call to cancel professional indemnity insurance for solicitors who are struggling to pay premiums

Earlier this month, the International Underwriting Association (“IUA“), the body representing underwriters in London that are separate from Lloyd’s, penned an open letter calling on the legal industry to allow insurers to cancel professional indemnity policies when lawyers fail to pay their premiums in the wake of the COVID-19 pandemic.

Continue Reading

FCA’s proposed changes to AML reporting could catch out crypto exchanges

Earlier this week the FCA announced proposals to extend anti-money laundering reporting requirements in its financial crime controls to include virtual currency exchanges, such as all cryptoasset exchange providers and custodian wallet providers. The aim of the change is to strengthen AML defences.

FCA

Continue Reading

Slap on the wrist for ruling with an iron fist: ‘Unreasonable’ FCA ordered to pay mortgage broker’s legal costs

Earlier this month, an Upper Tribunal Judge ordered the FCA to pay a mortgage broker’s legal costs. The Judge deemed the FCA’s decision to pull the business’ trading permissions for not having insurance amid a wide mortgage fraud probe, “unreasonable”.

FCA

Continue Reading

The FCA’s Conduct Rules – The New Requirement to Report

Investment Fund GraphSince 9 December 2019, the majority of FCA solo-regulated firms have been subject to the Senior Managers and Certification Regime (SM&CR) including the Conduct Rules which set basic standards of good personal conduct against which the FCA can hold people to account. As such, the rules are enforceable by the FCA and are intended ‘to improve individual accountability and awareness of conduct issues across firms.’

Whilst most firms are now familiar with the Conduct Rules, 2 November 2020 marks the first time that most solo-regulated firms will have to submit an annual notification regarding breaches of the Conduct Rules where disciplinary action has been taken. This is a requirement under section 64C FSMA and requires firms to report details about individuals who have committed breaches of the Conduct Rules, details of what Conduct Rules have been breached and details of disciplinary action taken (issuance of a formal written warning, suspension or dismissal, or the reduction or recovery of a person’s remuneration). The report is called REP008, and must be completed and submitted using Gabriel. The important thing to note, however, is that all firms must submit an annual notification even if there haven’t been any Conduct Rule breaches resulting in disciplinary action at that firm.

Continue Reading

FCA warns insurers to act fairly when paying small business COVID-19 related claims

Earlier this week, the FCA warned that it would get tough on against insurers that it finds are acting unfairly in paying COVID-19 related insurance claims. This was in response to complaints from small business groups that insurers are deducting the costs of Government grants from insurance pay-outs.

FCA

Continue Reading

LexBlog