Aggregators also in the spotlight
The Financial Conduct Authority (FCA) has confirmed its intention to scrutinise general insurance add-ons in 2013 and 2014, according to the regulator’s new business plan.
The regulator will officially open on 1 April 2013, but has already been preparing internally for the change.
The FSA started an investigation into general insurance add-ons last year, and the FCA’s business plan said that consumers might be being sold the wrong products and at high prices.
The FCA business plan honed in on:
- gadget insurance;
- home emergency;
- personal accident/accident cash plans; and
- guaranteed asset protection.
The FCA also said it was prepared for the potentially dodgy tactics brokers might use to get around the ban on referral fees.
In the document, FCA Risk Outlook 2013, the regulator said that firms could: “take short-term and more expedient measures to make up for earnings shortfalls by increasing sales targets (raising the risk of mis-selling) or raising prices without a change in the underlying risk”.
Incoming FCA chief executive Martin Wheatley (pictured) said: “Firms need to ensure that they are putting the consumer and the integrity of markets at the heart of their business models and strategies. This includes making cultural changes that promote good conduct, establishing oversight around the design and innovation of products and services, and ensuring they are transparent in their dealings with consumers.”
The regulator said it would have three main aims. These are:
- to secure an appropriate degree of protection for consumers;
- to protect and enhance the integrity of the UK financial system; and
- to promote effective competition in the interests of consumers.
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