FCA calls on insurers to take action as it publishes latest fair value data

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Summary:

The UK's Financial Conduct Authority (FCA) has warned insurance firms that they must take immediate action to ensure good consumer outcomes, citing concerns over the value of Guaranteed Asset Protection (GAP) insurance products. The regulator has identified evidence that some GAP products may not be providing fair value to customers, and has given firms a three-month ultimatum to prove otherwise. The FCA has also published its latest insurance Value Measures Data, which shows that only 6% of GAP insurance premiums are paid out in claims, while some firms pay up to 70% of premiums in commission to distribution chain parties. The regulator is taking action under the Consumer Duty and has warned that firms that fail to demonstrate fair value to customers can expect further action.