MGA adds Financial and Legal to Gap panel

MGA Alps has added insurer Financial and Legal to its panel for guaranteed asset protection (Gap) insurance.

Under the new agreement, Alps will offer a new Gap product to clients that is underwritten by Financial and Legal.

The proposition includes a range of value-added features, including cover for vehicles valued up to £125,000, extended policy purchase period of up to 180 days after vehicle purchase, fast claims payouts and pro-rata cancellation policy refund.

Ian Kember, business development manager at Financial and Legal, said: “We are pleased to be partnering with Alps, whose reputation for innovation, technical expertise and broker support in the add-on insurance space is second to none.

“Its heritage as a specialist MGA, combined with a strong track record in compliance and service delivery, makes it an ideal partner as we expand our presence in the Gap market.”

FCA action

Gap is an add-on to motor insurance that covers the difference between a vehicle’s purchase price and its current market value.

Just two months after the new Consumer Duty rules were introduced in July 2023, the FCA issued a statement explaining that it felt the product was failing to provide fair value to some consumers.

Therefore, in February 2024, the regulator confirmed that 80% of the gap market had agreed to suspend sales while service improvements were investigated by firms. The FCA later sent further requests to the remaining 20% of companies selling this line of business to pause gap sales in a second swift tranche of engagement.

In May 2024, the regulator said that some firms had restarted gap sales – to achieve this, businesses needed to demonstrate that their products provided fair value to customers, in line with FCA rules.

Michelle O’Reilly, managing director at Alps, said that “Alps was among the first MGAs to resume Gap sales post-FCA review and we continue to put education, compliance and customer value at the heart of our offering”.

She added: “We’re thrilled to welcome Financial and Legal to our panel. Its backing is a strong endorsement of our capabilities and credibility in the add-on market.

“Gap insurance remains a vital protection product for vehicle owners and an important revenue stream for brokers.”