But broker trade body adds that price comparison fixes should factor in recent thematic review
Biba has called the FCA’s proposed shake-up of the insurance add-ons market a “sensible first step” .
Following its thematic review of add-ons, the FCA yesterday called for a ban on pre-ticked boxes, mandatory publishing of claims ratios and breaking the point of sale advantage for motor guaranteed asset protection (gap) insurance.
Biba said the products covered by the FCA review offer valuable cover and that the suggested remedies “will go some way” to providing a more level playing field for professional insurers and protecting customers.
It added that the suggested remedy for gap coverage, would mostly affect “secondary” sellers of insurance products, such as motor traders, who sell these products at the point of sale.
The trade body said: “It will provide customers with a level of protection more akin to the protection that they get when using a broker.”
Biba head of compliance and training David Sparkes said: “The suggested remedies seem sensible first thoughts towards improving customer protection.”
However Biba said the FCA’s suggested remedies for price comparison sites, which are aimed at improving the way add-ons are offered on the sites, should pay close attention to the thematic review of price comparison sites to ensure a consistent approach.
Biba said it will now informally consult with its members about the FCA’s proposals and await further discussions to see how the suggestion of publishing claims ratios will develop and will be used in practice to ensure it is a fair reflection of performance.
Biba’s response to the FCA’s proposed add-on changes is a contrast to yesterday’s response from the ABI, which criticised the proposed remedies for being “surprisingly generic”.
ABI director of regulation Hugh Savill said: “Distinct markets call for bespoke regulatory approaches, not a ‘one size fits all’ approach covering everything from GAP insurance to travel insurance. We hope and expect that the FCA will take a more market specific approach to this as their work on this develops.”
He added: “These markets have been changing for some time to deliver better consumer outcomes.
“Opt-in insurance tick boxes are rare; and the industry has agreed guidance, through the ABI, on what consumers and car dealers need to think about when buying or selling GAP insurance alongside a vehicle; customers should shop around to get the best deal, rather than accepting a quote on a garage forecourt.
“We welcome the renewed focus on the role of price comparison websites in giving consumers good information about add-ons.”