FCA warn that Insurance firms may not be ready to implement new product governance rules there to ensure insurance provides fair value, according to a review published last week.
The review is part of the FCA’s ongoing work to ensure consumers receive fair value and investigated how firms designed, sold and reviewed their products to ensure they met the needs of their customers.
The review published last week showed that some firms had made good progress in meeting the FCA’s existing rules and guidance on product governance and value, issued in 2018 and 2019, as well as against temporary guidance on product value, issued in response to Covid-19 last year.
However, the review also warned that too many firms are not fully meeting the FCA’s standards. In addition, many firms are likely to be unprepared to meet new enhanced rules on product governance, which come into force on 1 October 2021. These new rules are part of a wider package of remedies introduced by the FCA to tackle the loyalty penalty and ensure that firms focus on providing fair value to all their customers.
The review’s warnings including:
- Insufficient focus on customers, outcomes and product value, including when considering value in the context of Covid-19
- Shortcomings in governance and oversight of products
Firms should ensure they read the review published. All firms should consider the review findings and how they apply to their own activities.