’Quite a bit of the essence of Consumer Duty is already present in the insurance broker market,’ says regulator’s director of general insurance

BrokerFest 2023: The FCA’s Consumer Duty regulatory requirements for insurance are an “iterative process, not a one and done thing”.

Speaking yesterday (23 February 2023) at Insurance Times’ BrokerFest 2023 event, the regulator’s director of general insurance (GI) Matt Brewis said: “Consumer Duty’s not going anywhere.” 

At the beginning of the year, the FCA highlighted that some sectors of the insurance industry were further behind in their planning for the implementation of Consumer Duty regulations and may struggle to meet the 31 July 2023 implementation deadline.

As part of the regulations, insurance firms are required to complete fair value assessments to demonstrate the value of their products to consumers.

Other requirements include ensuring that communications are presented clearly and that consumers are properly and fairly supported.

Despite this, Brewis told delegates that previous regulatory work completed in the general insurance sector had given brokers and insurers a head start on other areas of financial services that fell within the scope of the Consumer Duty.

He explained: “The GI sector is ahead of most parts of financial services because of the GI pricing reforms and the associated product governance reforms – quite a bit of the essence of Consumer Duty is already present in the insurance broker market.

“So in terms of distance to the implementation date in July, [brokers are] further ahead as a sector – you’ve put in the legwork to a large extent.”

More to do

Despite the GI sector’s familiarity with some aspects of the essence of the FCA’s new regulatory regime, Brewis said that there was clearly “still more to do”.

He added: “What I’m seeing is that when firms are putting their customers at the centre – where they’re looking at what they can do to best protect their customers – in spirit, they’re already there.

“The bit that comes next is then how you measure that and how you prove it to yourself and your boards.

“What information is needed to be able to show that and that’s where the big thinking is needed.”