The FCA said firms would have at least four months to implement any changes with companies given until the end of 2021 to issue updates to prices.
The FCA said firms would have at least four months to implement any changes with companies given until the end of 2021 to issue updates to prices. Although the FCA has not yet confirmed which changes would be introduced it has previously spoken about the need to end price walking among companies.
“If any rules are made, we propose to give firms an implementation period of until:
“The end of September 2021 for the systems and controls (SYSC) rules and product governance rules.
“The end of 2021 for the pricing and auto-renewal remedies and the reporting requirements.”
According to the FCA, new customers can pay as much as 30 percent less on insurance than existing customers who have been with a company for five years.
“What the measures mean for consumers in the short-term, is a potential increase in premiums on price comparison websites to level out premiums at renewal time.
“In the long run, people will see fairer outcomes as consumers have a more realistic understanding of the cost of their premiums over time, while promoting loyalty and healthier competition.
“Over the years price comparison websites have controlled pricing in the insurance market, pushing prices so low they’ve become unsustainable, which in turn leads to insurers bumping up prices at renewal to compensate for the initial low premiums set.
“Dual pricing has created an industry that demotes customer loyalty as comparison websites rely on people switching annually.”