The regulator brought in new rules around renewal premiums last April, and reminded insurers of them in October
The Financial Conduct Authority (FCA) brought in rules last year which require companies to clearly show the insurance premium a customer paid last year alongside their proposed renewal premium, and to show a prominent, clear and straightforward message to encourage customers to shop around.
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On Tuesday the regulator said the RAC was “failing to display the prior and current year premiums, and shopping around message as key information in its breakdown policy renewal documentation”.
“It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules. Firms failing to get this right may have led to consumers losing out as they do not have the right information to decide whether or not to shop around,” said the FCA’s executive director of supervision – retail and authorisations, Jonathan Davidson.
“We have already acted where we have seen particularly poor practice in firms and will continue to do so where we see firms not being transparent. As we said in October, we expect other firms to take notice of these issues, to look at what they are doing and to make sure they are getting it right.”
An RAC spokesperson said: “While our breakdown policy renewal documentation did accurately contain all the necessary information, we recognise that some of the key information in our letters was not as prominently displayed as it should have been.
“We continue to be committed to giving members clear and fair information so they can make the right decision, and are contacting those affected to ensure they are satisfied.”
The FCA highlighted its new rules, and how firms were failing to meet them, in October last year. The four particular areas it highlighted where companies were not living up to expectations were:
failing to implement the new rules for all products and customers;
misstating the previous years’ premium;
leaving out the shopping around message or not presenting it in a way which draws the reader’s attention; and
failing to properly identify all customers who needed renewal information either because of system error or a mistaken interpretation of the type of customer that is captured by FCA rules.