General insurance pricing practices – FCA publishes final report

The FCA’s final report emerged yesterday (22 September) and focuses on remedies for customer detriment arising from certain of the GI pricing practices it has been investigating in depth since it raised the topic in its 2017/18 Business Plan. The remedies proposed by the FCA include requirements for greater transparency for customers and improved reporting to the regulator. However, the most eye-catching remedy proposed is a ban on “price walking” (charging higher premiums for loyal customers), which the FCA CEO described as “radical” in the media coverage of the report.

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Effective delegation?

terms and conditions

A regulatory guide published by the financial services regulator in 2007 requires that “a customer’s experience should not be affected by whether a product or service was provided and distributed by a single institution or by two or more institutions”. This guide – The Responsibilities of Providers and Distributors for the Fair Treatment of Customers, or RPPD – is still very much in force and on 2 June 2015 the regulator (now the FCA) published results of its thematic review of delegated authority in the GI market, which examines how effectively firms are performing against this standard.

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Whiplash reforms – medical evidence

steering wheel

The MoJ continues to work, largely behind the scenes, with stakeholders on the detail of the so-called “MedCo”. This was the working title for the project to design and deliver an IT solution which would randomly allocate instructions to independent and accredited medical experts in low value soft tissue injury claims.

The MoJ published its analysis of responses to its second tranche proposals for whiplash reform (the first being the introduction of fixed charges for medico-legal reports in low value soft tissue injury claims).

In respect of the first set of reforms, which apply to CNFs lodged after 1 October 2014, the MoJ has issued a small and discrete correction (to the definition of “associate” for the purposes of independence of the reporting expert). This quite minor amendment should be taken with a note of caution – If the Moj’s thinking on “MedCo” is to be implemented before the Election then it would be hoped that the speed of delivery would not pay detriment to a properly functioning solution.

The Civil Justice Council has issued revised Guidance for the instruction of experts in civil claims. The following extract deals with the clear unsuitability of instructing experts on contingency arrangements…

Payment of experts’ fees contingent upon the nature of the expert evidence or upon the outcome of the case is strongly discouraged. In ex parte Factortame (no8) [2008] QB 381 at [73], the court said “we consider that it will be a rare case indeed that the court will be prepared to consent to an expert being instructed under a contingency fee agreement”.

About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).