FCA finds array of Consumer Duty breaches in retail insurance sector

The regulator is about to address problems it has found in the premium finance market by reminding firms of their Consumer Duty to provide value for money - and, according to a statement, "taking action against specific firms where necessary".

By Neasa MacErlean

The sector enables customers to pay their insurance cover by instalments, rather than in one lump sum but the regulator calculates in an interim review of the market that customer charges are "typically between eight and 11 per cent more" for monthly than annual payment plans. The Financial Conduct Authority has also discovered higher customer charges in the motor sector where over 97 per cent of monthly plans cost more than the annual ones. This compares to 70 per cent in home cover. The regulator will address issues with individual firms before proceeding to publish its final report on the subject - due by the end of 2025.