FCA to tackle insurance add-ons
The FCA are going to tell insurers that add-ons for things like mobiles, holidays and home emergencies aren't currently competitive, so therefore, not at all working in the best interest of consumers.
This means that the regulator is all set to announce new rules after they investigated competition rules around insurance companies. For us, as well as cheaper offers (you'd hope), this means these add-ons will now be explicitly explained to us and up-front, rather than tucked away behind vagueness.
These new rules may seem like small fry, but if you consider that some motor insurers generate around a third of their profits from add-ons, this will change the way they do business for fear of big fines. Of course, last year, Swinton was fined by the FCA to the tune of £7.4m fine, with a further £11m paid out to customers who had been mis-sold add-ons.
Unveiling the initial review, the FCA said: "People are being made to feel they have to have these products when they don’t really need them. Our concern is that the products are generally poor value, and, by and large, people don’t pay too much attention to the terms and conditions. We are saying there could be anti-competitive behaviour."