Remaining Gap Providers Told to Pause Sales of Product by FCA

Last month, the FCA announced that 80% of the Gap market had agreed to suspend sales after it expressed concerns about products failing to provide fair value to consumers. Now, the FCA has sent requests to the remaining providers of guaranteed asset protection (GAP) insurance to pause sales of the product.

The suspension is scheduled to take effect from the end of March 2024.

The FCA has reiterated that it does not plan to ban the product and will review revised proposals from insurers on how they ensure that products offer fair value to customers. Until those changes are implemented, providers of GAP insurance will be unable sell the product as supply is restricted.

Sheldon Mills, FCA Executive Director of Consumers and Competition, welcomed the agreement by GAP providers to pause sales, noting that “in its current form [GAP insurance] does not offer fair value and we want to see improvements.”

The FCA has expressed concerns over the design and sale of GAP insurance across all distribution channels and demands that firms make significant changes. The regulator has said that it is open to considering proposals for different distribution channels and acknowledges that some channels may be able to implement changes quicker than others. Mills continued: “We will continue to work closely with firms as we carry out further engagement to resolve these issues and ensure customers are getting fair value products that meet their needs.”


About the author

Jessica joined RWA in 2018, having graduated with a First Class Honours degree in Film Studies. Her role as a content designer involves developing new and engaging e-learning modules as well as assisting in the creation of articles for Insight. 

Get UKGI Insight In Your Inbox

Regular business news and commentary delivered direct to your inbox each week. Sign up here