protect legal and regulatory review july 2015. it just never stops... (c) paginator limited 2015

PROTECT

LEGAL AND REGULATORY REVIEW

JULY 2015

It just never stops . . .

(c) Paginator Limited 2015

30 + significant legal and regulatory developments over the past 14

weeks!!

Time for one a minute until lunch!!!

So – let’s sweep up as many as possible, at twice the speed, by monthly overviews; and

Then focus on five “biggies” (and a slow burner)

Not much time for jokes today!


What are the Biggies?


The biggies The Consumer Rights Act 2015

CP15/13 – more proposed remedies from the Add-on Insurance Market Study

TR15/7 – FCA’s report into “Delegated Authority: Outsourcing in the General Insurance Market

PS15/13 – FCA’s final rules and guidance to resolve competition issues in the GAP Market

DP15/4 – exploring a range of options for introducing value measures into the GI Market

DP15/5 (the slow burner) on “Smarter Consumer Communications”


The Monthly Review


March (after 20 March) FCA published CP15/13 – further remedies from the Add-on Insurance Market Study –

banning opt out selling and proposing guidance to “improve informed decision making for add-on buyers” (a biggie)

FCA published its Business Plan for 2015/16 – light on GI specifics (but with concerns about supervision of Appointed Representatives highlighted – so be warned)!

PRA published its views on challenges to the insurance industry - highlighting the same concern that we will see from the FCA (in a biggie) – that insurers rely far too much on intermediaries and other niche operators for product design and market intelligence

MAS comes out well (compared to what the Treasury wanted) from Christine Farnish’s Review. It gives support for the MAS debt assistance role, but is less keen on the web based money advice role (others do it better?). Oddly the Report recommends that FCA should make a rule that firms should promote the MAS website!!!!

The Insurance Fraud Taskforce published its interim report including an initial recommendation that ABI and BIBA should update industry guidance on the prevention of fraud by the end of the year

The Consumer Rights Act 2015 received Royal Assent on 26 March (a biggie) (c) Paginator Limited 2015

April FCA consulted on fees and levies for 2015/16 – suggested upping them by

8.4%. In June FCA reported how appalled everyone was with this increase – but said “tough”!!

FOS issued its plan and budget – levy frozen to reflect the beginning of the end on PPI complaints - but FOS warned that it expects rises in complaints about packaged bank accounts . . .

Lloyds issued its Market Oversight Supervisory Plan for 2015 – a really good overview of risks facing the market - all in ten pages

FSCS – compensation limits are to increase from 3 July – up to 100% for general insurance products where the claim arises from death or incapacity due to injury, sickness, or infirmity of the policyholder or benefits are payable in the form of income and/or other regular payment. Remember to update your consumer disclosures

FCA took on the full ambit of its competition powers – good luck!(c) Paginator Limited 2015

Moorhouse Group - enforcement The enforcement focused on some very serious and naive failures in

management systems and controls (how are yours)?

A key issue was FCA’s demand that firms provide “balanced information” to customers

The balance is between ensuring that customers are given:-

“appropriate information” about limitations and exclusions “adequate information” on which to make an “informed decision”; and information which is presented in a clear and fair way; but are not overloaded with information

You have heard me say it before (and you will hear more today) . . . unless you simplify products hugely – or slice and dice them - you are going to hit problems with the regulator

Which takes us into May and more on the same issue . . (c) Paginator Limited 2015

The ECJ on Unfair Terms

The Court found that financial products are, by nature, complex - if the language used to explain the contract is too “plain” then some important elements of importance can be lost

The ECJ is, however, concerned that if firms remove too much complexity then this might remove “desirable cover” from the market

However, if the desirable cover is all included - then the concepts required to describe cover can move outside the intelligence (intelligibility) of the average (11 year old) consumer

The ECJ ruled that the test of whether product terms are fair is whether a “grammatically intelligible” description of them can put the customer “in a position to evaluate the economic consequences which the customer will derive from the cover”?

A big question. All firms must get to grips with this dilemma – focusing hard on who your customers are and what is their capacity to understand, within the sales process? More on this later

Do not, for one moment, rely on cancellation periods or any other expectation that the customer will read or understand what you write down


More in May

FSCS announced no levy for 2015/16 for PPI claims!

FCA published a new Chapter 17 for Part 2 of the Financial Crime Guide – although directed at commercial brokers, FCA underlined that it is relevant to all intermediaries

If you offer premium finance be very careful – FCA is on the warpath – see TR15/5 “Provision of premium finance to retail general insurance customers”. My experience is that many firms do not understand even where credit is, and is not, involved

FCA published its new “Beta Website” – worth a look, before FCA over-populate it!

FCA announces that it is carefully considering the implications of the decision in Plevin v Paragon Personal Finance on complaints about PPI – (more on this later)

FOS published its annual review – its stunning conclusion? That “fairness means different things to different people”!


Two more issues before we leave May . .


Complaints handling . . .

Buried in a Quarterly Consultation Paper were the amended DISP provisions necessary to implement the Alternative Dispute Resolution Directive by the deadline of 9 July

Hopefully you are aware of this and have made all the necessary changes to your customer communications by . . yesterday?!!

We are still awaiting FCA’s response to the remainder of its consultation (CP14/30) on changes to the complaints handling rules (aimed at reducing the number of complaints handled as “formal complaints”)


FCA and the Connected Contract Exemption

FCA has engaged with the industry as to whether the “connected contract” exemption can apply to a firm which has obtained full (as opposed to interim) consumer credit authorisation? FCA have now published a Q&A on the issue

FCA’s headline answer is that the exclusion is only available where a retailer’s “main line” of business does not otherwise consist of carrying on a regulated activity – which simply abbreviates a rather more complex explanation of the legal position at PERG 5.11.13

The FCA view is that, if a retailer has a main line in selling, say, computers, but sells most of them on credit, then it has another “main line” in, regulated consumer credit (even if its CCA permission is limited), and cannot rely on the exemption to avoid authorisation or AR status for its insurance sales

This raises the question at what point does offering credit become a “main line”?

Some may argue that this is nonsense – the word “main” means what it says(c) Paginator Limited 2015

Into June (a biggie month) . . .

FCA published:-

TR15/7 - its report into Delegated Authority: Outsourcing in the General Insurance Market (a very big biggie)

PS15/13 - its final rules and guidance to resolve competition issues in the GAP Market (a sort of biggie)

DP15/4 - exploring a range of options for introducing “value measures” into the GI Market (a real biggie)

DP15/5 - on Smarter Consumer Communications (a slow burner biggie)


July On 1 July the European Commission confirmed that political agreement has been reached

on the terms of the new Insurance Distribution Directive (ex-IMD2) to replace IMD. We are awaiting the detailed text but a press release contains the following information about the final agreed content:-

Greater transparency: insurance distributors will have to be clearer about the price and the costs of their products, so that it is clear to consumers what they are paying for. Significantly the press release goes on to say “Importantly, the consumer should know whether the seller of an insurance product has an own economic incentive to sell that particular product”

Better and more comprehensible information, so that consumers can take more informed decisions, with a “simple, standardised Product Information Document for non-life insurance products”

Where insurance products are offered in a package with other goods or services consumers will have the choice to buy the goods or services without the insurance policy

The press release confirms that the provisions of the new Directive will also apply when a product is bought directly from an insurance company


Biggies expected by June - but not yet “out”

New CASS 5A rules on the holding of client money by insurance intermediaries – and how to avoid them by effective risk transfer

The feedback to the changes to complaints handling (CP14/30)


Now – the Biggies!


Biggie 1


The second consultation on Add-on Market Remedies

Much wider application of information remedies than expected (originally directed at PCWs)

The Consultation is now closed

A new Rule to ban opt-out selling to apply to all add-on insurance products sold alongside any regulated financial primary product. So the ban is not limited to general insurance markets. FCA have proposed some flexibility, e.g. on renewal, provided there was a clear opt-in when the product was originally purchased

The second “information” remedy is to be delivered via “Guidance to help firms provide appropriate information [about add-on insurance] in a timely manner to enable customers to make an informed decision”. The proposed Guidance focuses on:-

introducing add-on insurance to customers “earlier in the sales process”; helping customers to compare packages of primary products and add-on

insurance, with a clear price for the whole package given; displaying the annual price of add‑on insurance (as well as the monthly price); and reminding firms that add‑on insurance contracts are insurance contracts in their

own right, and as such, are subject to the full ICOBS requirements(c) Paginator Limited 2015

What FCA is trying to achieve

The Market Study found that add‑ons, or information about add‑ons, were often introduced late in the sales process

FCA state that it would like firms to consider bringing forward the introduction of add-ons

“It is likely to be too late to discuss the most common add‑ons for the first time after the customer has selected the primary product they want to purchase, and moved into transacting”

The proposed Guidance (in Appendix 2 to the Paper) is all aimed at this


Malcolm’s thoughts

Should not be a major impact on firms already operating compliant, principles based, customer focused businesses

Nobody should be selling anything (except as expressly permitted) on an opt out basis

The “Information remedy” largely underscores, with detailed Guidance, the requirement of ICOBS 6.1.5R that:-

“a firm must take reasonable steps to ensure a customer is given appropriate information about a policy in good time and in a comprehensible form so that the customer can make an informed decision about the arrangements proposed”

Yet another example of the key issue that you can no longer try to sell complex, multi cover products in a point of sale environment, and expect the consumer to take in what you are offering

Be alert that the proposed Guidance then goes on to pick up particular issues relating to packaged product price disclosure . . . .


Packaged Pricing

FCA say that, at present, “most firms do not allow customers to sort or compare based on a package of a primary product and selected add‑ons”

As such, “customers find it hard to judge the value (total premium) of the complete package”

FCA say that, as a result, customers may select the cheapest primary product, but not the cheapest package of primary product and add‑ons


What FCA would like you to do . . .

Wherever a comparison between packages of products could be made, you should allow customers to develop a package of a primary product and selected add‑ons, and to deliver a combined price for them

The individual contracts “will need to be priced”, but a clear display of the package price “could help provide the customer with more appropriate information”


Biggie 2


In force 1 October 2015Two different issues

Significant changes in the regulation of unfair contract terms

Major challenges for the warranty market


Unfair Terms

The 2015 Act repeals the Unfair Terms in Consumer Contracts Regulations 1999

Replaces those Regs with tougher provisions under which even the core provisions of your insurance product can be assessed by FCA as unfair - unless they are “transparent and prominent”

FCA is updating the Unfair Contract Terms Regulatory Guide (UNFCOG) to reflect its increased control over product terms

Whilst on this issue . . .


The slow burner Biggy


Smarter Communications

FCA found that almost no one read the T&Cs - and the few that did were left none the wiser

FCA think that firms should create product descriptions and terms for consumers with at least as much behaviourally informed creativity as is applied to business development, marketing and financial promotions

FCA accept that T&Cs constitute (part of) the legal contract between the firm and the consumer but huge effort is required to stick to comprehendible essentials

Particular bad practice is where a box confirming that the T&Cs have been read can be selected by the consumer before the time it takes a person of average cognitive ability to read the document, or where the consumer is given less time to enter into a binding agreement than is required to read the T&Cs

These issues will crop up time and time again in other “biggies”


Now back to Biggie 2 and the second impact of the Consumer

Rights Act


Consumer Rights and Warranties The 2015 Act changes the rights which consumers have to remedy defects in

goods suppled to them

The extended warranty product seeks to extend, or to give greater clarity to, these rights

PERG tells us that an extended warranty will be a contract of insurance unless it:-

“implements, or bears a reasonable relationship to, the seller's statutory or common law obligations as regards the quality of goods of that kind or is a usual obligation relevant to quality or fitness in commercial contracts for the sale of goods or supply of services of that kind”

So, if the seller’s statutory obligations change (as they do under the CRA) – so do the boundaries of where a “dealer extended warranty” becomes insurance . . .

The non-insured warranty is already under great threat from FOS - and the CRA is not going to help!


Biggie 3


Don’t be deceived by a boring title

This Review encapsulates nearly everything which worries FCA

(competition law apart) about the way the general insurance market

is structured and operates


Delegated Authority . . .

TR15/7 is concerned with the issue of “delegated authority” (a Lloyds market terminology) but the Paper apples to all “distribution chains”

The focus of the paper is (as always now) on the consumer outcomes arising from product design and responsibility for conduct of business

FCA’s fundamental concern is that the insurer (or underwriter/managing agent) has become far too remote from consumer outcomes

The paper says this is a significant contributor to conduct risk

The PRA (see earlier) has also identified that this behaviour contributes to prudential risks for the insurer


The problem

The Report (which of course averages out a wide range of findings) says that many insurers leave judgements about product design and conduct risk to niche intermediaries

That would indeed be (generally) the industry perspective as to how “our” market often works

Similarly the intermediary would leave prudential risk to the insurer!

FCA say that this state of affairs leaves the potential for product design (and especially product governance) to be unresponsive to consumer needs and outcomes

FCA found breath-taking lack of knowledge within some insurers as to both product content and as to where and how product was being distributed


The solution

For once FCA is really alert to the dangers arising from its intervention into this issue

It says that the solution is not (as has started happening) insurers seeking to demonstrate their control via audits etc.

Insurers need to learn about what they do not know about – not simply demand information

FCA wants insurers to become genuinely engaged in, and reactive to, their products in the market

The way to do this is to have even handed and open dialogue – “operational partnerships” with their wholesale and other key intermediaries and service providers


One idea . . .

That the “Product Oversight Group” (POG) concept be extended

That

insurers intermediaries, distributors, TPA’s delegated claims handlers

all sit on one joint POG (or POGs) so that joint product oversight, knowledge, experience and thinking can be shared, communicated and (most important of all) learned from


Biggie 4


FCA “is not for turning”

FCA reported great industry concern about the proposed GAP remedy on which it consulted . . .

. . and ignored it all!!!!!

“we have listened very carefully to all that has been said to us and we are not changing anything from our proposals in our Consultation”

So the delivery of “required information” followed by a “deferred opt in” will be in force from 1 September


Be careful . . .

PS15/13 contains some FCA “expectations” which will not find their way into any formal Guidance or Rules

You therefore do need to read PS15/13 to pick these issues up – for example FCA’s thinking on monitoring high levels of “customer initiated sales” (page 19) and on how the required information should be provided (pages 21 & 22)


Biggie 5


Some important preliminary comments

DP15/4 may have been issued under the “banner” of the Add-on Insurance Market Study – but the matters it discusses will be applied to the whole GI market

FCA have subtly morphed its proposal for a “claims ratio” into a much wider discussion about the value of general insurance

In essence FCA started out on its Market Study with a view that there was something special, and particularly worrying, about add-on insurance. As it has educated itself, over the past two years, further about the wider volume GI markets, it has found issues of equivalent concern to it throughout that wider market

Do not under-rate the significance of DP15/4 – along with TR15/7 it covers most of FCA’s concern to fundamentally change the GI Market


Note . . .

DP15/4 is not offering final proposals for consultation

(pause for irony) but a Discussion Paper to proceed consultation (though FCA’s

views seem pretty set)


FCA’s introduction to the discussion . . .

“This paper explores a range of options for introducing a measure, or measures, of value in GI markets

These measures do not give a perfect representation of value – not least because all consumers have different needs and risk appetites – but they can be used as indicators of value

We are committed to introducing such measures in order to shine a light on poor value in the market place

We want to increase competition on value, and incentivise firms to improve value”


A key preliminary issue . .

FCA are not discussing at this stage any requirement for firms to inform customers of any measure of the “value” of the product being offered to them “during their purchasing journey”

FCA say that any such point of sale disclosure would “need to be subject to consumer testing and would be part of a later phase of the project” (of developing value measures)


So what is FCA discussing?

The collection and publication of “a measure, or measures, of value to increase transparency in GI markets”

The incentivisation of firms to improve product value, and

An exploration of the case for a future extension of any measure(s) to be disclosed to consumers “in due course”


Why is FCA discussing this?

In reaction to its Market Study finding of low claims ratios within the Add-on Market – but now extended to the wider GI Market

To consider whether some form of publication of this ratio (or some other measure of value) would help “incentivise firms to improve product value”

FCA see this as part of its wider drive to use “transparency” (aka naming and shaming) as a means of delivering on its competition and consumer objectives – in line with its approach on e.g. publication of complaints data


What value measures are FCA discussing?

The “claims ratio” as a stand-alone value measure

A value based on a package of claims frequencies, claims acceptance rates and average claims pay-outs; and

The “claims ratio” plus claims acceptance rates;

FCA reject any value based on “peace of mind”. . .


“Peace of mind”

FCA say that both consumers and firms identify “peace of mind” as a valuable part of insurance products. However, it says, “peace of mind” is highly subjective and dependent on an individual’s risk tolerance and wider circumstances. It can also be misplaced or secured at very high cost

FCA found that consumers frequently overestimated their cover or failed to understand excesses, restrictions or exclusions. This highlights that “peace of mind” can be misplaced

Even where the consumer has purchased suitable cover, and might be justified in having “peace of mind”, the insurance could still be overpriced

FCA conclude that “peace of mind” does not necessarily equate to a good value product (where an assessment of cost and quality/benefits is conducted). As such, FCA did not consider “peace of mind” as part of the value measures discussion


Option 1: The Claims Ratio FCA define the claims ratio as the total of paid claims and incurred but still

outstanding claims / the gross earned premiums. FCA believe the claims ratio is “a useful indicator of value, giving an indication of potential quality across a range of factors relative to the price paid by the consumer”

FCA say that a high (or low) claims ratio could suggest that, relative to the price paid, the product performs well (or poorly) in terms of the following factors:-

the level of cover the probability of needing to make a claim the claims pay-out (which will be a reflection of the level of pay-outs and

the frequency of claims made) the sales process (i.e. the policy is likely to be bought by consumers who

need and understand the cover) the firms’ approach to handling claims, and the level of consumer engagement (i.e. consumers know they own the

product and what it covers)(c) Paginator Limited 2015

FCA’s views on Option 1 The Pros

As on the previous slide – plus FCA say that products with a higher claims frequency and claims pay-out will typically have higher claims ratios than similarly priced products with lower frequencies and pay-outs

Where consumers are less engaged in products this could potentially result in lower claims frequencies and lower claims ratios

The Cons

The claims ratio will not capture differences in customer service, which can contribute to consumers’ experience of purchasing and owning insurance

There may also be differences in the measure that may not be reflections of better or poorer value. For example, firms may take different approaches to fraud prevention, which could result in those with stronger controls having lower ratios


FCA see the Pros outweigh the Cons

FCA say that, as an aggregate measure, the claims ratio does not reveal which factors are driving the resulting percentage but policies with higher claims ratios are likely to perform better on average, relative to the price paid

FCA believe that it is likely that any change in a firm’s approach to pricing, claims handling, cover and exclusions, or policy excesses will have an impact on the claims ratio

As such, FCA conclude that the claims ratio incorporates in one measure a number of aspects of quality and price which can act as an indicator of value


Option 2: disclosing claims frequencies, claims acceptance rates and average

claims pay-outs FCA say that claims frequencies (number of claims notified / exposure or

average policies in force) show how often consumers are likely to make a claim

Claims acceptance rates (number of claims accepted / number of claims notified (less the number of claims still being considered) show what proportion of claims are accepted, relative to the total number of claims made. In addition, FCA say that the claims acceptance rate could provide an indication of the breadth of cover, the level of restrictions in the terms and conditions and the firm’s approach to claims handling

Claims frequencies and claims acceptance rates could also potentially give an indication of the level of consumer understanding of a product; with “consumers being more likely to claim successfully on products that they understand better”

Average claims pay-outs (total claim pay-out / total number of claims) show the average amount paid out for a successful claim, and could indicate the scale of exposure consumers are typically protected against when they need to claim, although individual claim pay-outs could fluctuate significantly from the average


FCA’s views on Option 2


The Pros

It would enable users to assess a number of different qualities of a product, which could allow multiple conclusions to be drawn. Unlike a single (claims ratio) measure, this data could potentially highlight which aspects of a product are performing better than others – which in turn could enable firms to focus their efforts on areas where their products are not delivering value

The Cons

The complexities involved in understanding a number of individual measures and the relationships between them could cause confusion for users of the information. For example, claims frequencies and average claims pay-outs, when looked at separately, may not adequately enable users to gain a clear understanding of the different risks covered by a product

Option 3: Disclosing claims ratios and claims acceptance rates

The claims acceptance rate is the percentage of claims submitted by consumers which are accepted by insurers

FCA think that claims acceptance rates could be an indicator of whether a product performs well in terms of the following factors:-

consumers’ understanding of the level of cover provided by a product (which could give an indication of the quality of the sales process)

the breadth of cover consumers’ expectations at the time of needing to make a claim, and a firm’s claims handling approach

A low claims acceptance rate could highlight issues with the sale of a product; resulting in consumers believing they are covered for an event, when in fact they are not


FCA’s Views on Option 3


The Pros

Using the claims ratio as a single measure is less able to point to different factors which might be driving product value. FCA therefore see the potential for claims acceptance rates to provide an indication of the additional aspects of product quality listed on the previous slide

The Cons

There will be some products which have lower claims acceptance rates than others. Reasons for this include, e.g. there being a larger scope for query over whether a consumer is covered for a home claim than for cover in place for a motor incident. Therefore, a high or low claims acceptance rate will not always be an indicator of quality – especially when looking across different product categories

Claims acceptance rates do not link to the retail premium and cannot give an indication of financial value. However, FCA think combining this measure with the claims ratio can offer that link

FCA’s overall assessment of the options

FCA believe that any of the measures described in this chapter could potentially meet its objectives

Its current assessment is that the claims ratio, either on its own or with another measure, is preferable to a package of options. The claims ratio covers “most elements of value in a single figure and potentially allows a greater degree of comparison”

FCA does recognise that there are limitations with the claims ratio and other measures have other potential merits – hence the Discussion Paper and a call for further views


How would the data on value be collected?

FCA say that insurers should have access to most of the data required. Insurers will handle or outsource claims handling functions, and “should have strong oversight of claims and product data”

Where products are white labelled, FCA believe the firm best placed to perform the calculation will be the firm that performs the underwriting function for that product

For the Lloyd’s market, FCA consider that Managing General Agents are in the best position to calculate the potential measures outlined in the Discussion Paper, although it would be interested in receiving feedback on this point

FCA recognise that for some measures there may be gaps in the information that insurers hold, but this should be obtainable by them - as otherwise this might “potentially raise questions about firms’ product governance processes, and how they currently assess how their products deliver value and good outcomes to consumers” (n.b. previous biggie)


Reporting and Publication Periods and Thresholds

FCA’s starting point is that the measure(s) could be published annually, in a comparison table format, on its website

FCA consider a one year reporting period may provide the most helpful data, with the possibility for the data to also be supplemented by multi-year averages

The requirement to report value measures could be limited to where the earned premiums for a product, or reporting category in the most recent year, are above a certain level. “One approach might be to set a threshold of £1 million for gross earned premiums by product”


How would FCA envisage using a value measure or measures?

FCA say that the outcomes from the collection and publication by FCA of value measures would include:-

users of the data could look up results for an individual firm across a range of products, or could compare data for a product across a number of firms

data could be used by consumer groups and the financial press to highlight poor value products or firms; for example through consumer campaigns or warnings

individual consumers might consider the data in making their own buying decisions

Price Comparison Websites might incorporate measures into their sales

journeys; and

Particularly Note: FCA could use the data as an additional source of intelligence in prioritising areas for further investigation or supervisory intervention


A word about DP15/4 - Chapter 6

Chapters 1 to 5 of DP15/4 contain the issues which FCA have put up for discussion and which we have covered in the preceding slides

Chapter 6 deals largely with issues which FCA considered, but then rejected

There is, however, one issue buried in Chapter 6 which is very different . . . .


Is commission disclosure back on the Agenda?

FCA say that long and complex distribution chains can increase the cost of distribution and “erode value to consumers by contributing to higher premiums”. It also says that “Commission and other incentives can encourage intermediaries to sell products that are not right for consumers, in turn contributing to poor consumer outcomes and low value”

FCA say that it would be “interested to hear from firms whether it should consider other ways of capturing and highlighting distribution costs, including total commission or other distributor income”

FCA says that any such measure could be published alongside other measures it has considered in DP15/4, or “we could require firms to disclose this data to consumers at point of sale”. FCA note that making the cost of distribution more transparent and the merits of commission disclosure will “also help us consider the implications of the Supreme Court Judgment in Plevin v Paragon Personal Finance Limited”


What happens next on Value Measures?

Whilst FCA seem very committed to the claims ratio as a preferred option, it also seems genuinely interested in further feedback on the issues raised in the Discussion Paper

Comments must be made by 24 September 2015


All the Biggies tell us that . .

The existing model of one (large) size fits all GI products designed and distributed by niche intermediaries with the primary aim to deliver revenue to non financial services-specialist providers is not acceptable

Insurers must become far more engaged with the consumer need, demand, understanding of, and outcomes from, their products

FCA will become hugely more engaged in the “value” of products, in the content of products and in the terms of products

Consumers must obtain, and retain, a far better understanding of what a product offers them - and what it does not offer them


The biggest challenge of all . . .

(which FCA recognise) is getting the balance right between the delivery of clear, transparent and comprehendible information to customers without this leading to customers being uninformed of key benefits, exclusions, or limitations which may affect their decision to purchase

For me the only way forward is product simplicity – but (as the ECJ says) too much simplicity might also remove desirable cover from the market

With FCA driving you to reveal and deliver value – the value of products has to become more focused on the individual consumer

That means offering consumers clear choices – enabling consumers to tailor-make their own cover – and making value work for you, by exposing the risks retained by the customer if they opt for low cost insurance . . .


Thank You

www.paginator.co.uk


protect legal and regulatory review july 2015. it just never stops... (c) paginator limited 2015

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