FCA gives 1 April deadline for renewal transparency

The Financial Conduct Authority (FCA) has issued its proposed new rules and guidance for general insurance renewals in the retail market.

The watchdog first consulted on its proposals in December last year.

According to the FCA the proposals were intended to address concerns about levels of consumer engagement and the treatment of consumers by firms at renewal, and the lack of competition that results from this.


In December it asked for feedback on requiring firms to (for all personal lines general insurance markets):

  • disclose last year’s premium at each renewal
  • include text to encourage consumers to check their cover and shop around for the best deal at each renewal
  • identify consumers who have renewed with them four consecutive times, and give these consumers an additional prescribed message encouraging them to shop around

Alongside this, it proposed guidance on how firms can maintain records to demonstrate compliance, including keeping a record of premiums.

Clear communications

It also proposed guidance detailing the importance of providing appropriate information and issuing clear communications to consumers at renewal.

It further addressed how firms should treat consumers who want to switch or cancel, and the appropriateness of fees or charges for cancelling or renewing policies.

The consultation closed in March 2016 and received 113 responses.

The watchdog has now confirmed that it will push ahead with the proposals however it has made certain alterations in light of the feedback.

These consist of:

  • a new requirement that where a consumer’s circumstances have changed during the course of holding their policy, firms must give an annualised premium reflecting any mid-term adjustments, instead of last year’s premium. Where there has been no mid-term adjustment, firms must still show last year’s premium.
  • an alteration to the ‘shopping around’ disclosure that firms must provide, so that consumers are encouraged to consider cover when shopping around as well as price
  • bringing 10-month policies into scope, in addition to annual policies, to reduce the risk of some firms avoiding the FCA’s proposals

Implementation date

In addition the FCA stated that the proposed implementation date of 1 January 2017 has been changed to 1 April 2017 “to ensure that all parts of industry have enough time to implement our proposals”.