11:53 am, August 21, 2024
Gap providers were among those in the insurance sector being warned today by the Financial Conduct Authority that more still needs to be done to prove customers are getting fair value or good outcomes.
The City regulator vowed that in order to give customers confidence, it’ll continue taking action against firms that offer poor value.
Car Dealer exclusively revealed in January that the FCA had written to insurance providers warning them it may intervene in the Gap (guaranteed asset protection) market and asking them to voluntarily withdraw their products from sale.
It took the action because it said it was concerned that Gap, which is an important revenue stream for car dealers, wasn’t currently offering ‘fair value’ to customers and said it wanted to ‘see improvements’.
Two weeks later, the FCA confirmed that it had asked insurers to suspend sales immediately.
Then, in March it asked all Gap providers to pause sales of the product while it investigated further, saying it had sent requests to the last remaining providers of the product to stop selling it by the end of the month.
But in April, the FCA granted some of the insurance providers a temporary extension on the moratorium, giving them to the end of the month.
Then, in May it said a ‘significant proportion’ of firms were being allowed to resume Gap sales after it had taken action to improve fair value.
In a report published today, the FCA set out issues over information sharing between insurers and brokers, as well as identifying target markets.
Matt Brewis, director of insurance at the FCA, said: ‘Insurers need to make sure their customers are getting fair value.
‘Progress is being made, but we are still seeing too many examples of insurers and brokers lacking the right information, governance or oversight to ensure their customers get consistently good outcomes.
‘All insurance firms should take note of our findings and make improvements where appropriate.
‘We’ll continue to take action where we see poor value so consumers can have confidence when buying insurance products.’
Highlighting its concerns over the Gap sector, the regulator also published its latest Value Measures Data today, covering January to December 2023, warning insurers that if they can’t demonstrate that their products meet its rules and provide fair value, it’ll take appropriate regulatory action.
