The FCA expects the New Year to deliver “fairer home and motor insurance renewals.” The reforms followed a review that uncovered that many insurers were increasing prices for renewing customers year-on-year – known as ‘price walking’.
The rules on pricing, auto-renewals and reporting came into force on the 1 January 2022. Firms have a transition period until 17 January to fully implement the pricing and auto-renewal disclosure remedies, but, after 1 January, they must pay redress or make repayments to people if the delay to implementing negatively impacts them.
The FCA hopes the new rules will save consumers £4.2bn over the next 10 years.
In a statement, Executive Director, Consumers and Competition at the FCA, Sheldon Mills, said, “Our interventions will make the insurance market fairer and make it work better. Insurers can no longer penalise consumers who stay with them. You can still shop around and negotiate a better deal, but you won't have to switch just to avoid being charged a loyalty premium.”
“We are keeping a close eye on how insurers respond to our new rules, to ensure that the benefits of a better insurance market are delivered to consumers.”
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