Britain’s financial watchdog on Thursday laid out its efforts to raise s
tandards in the home and travel insurance market after a consum
er group made a rare “super-complaint” against the regulator, accusing it of letting customers down.
The Financial Conduct Authority (FCA) said it was investigating two insurers, had blocked a third from operatin
g, and said three others were considering whether they owed customers compensation.
The regulator said it had also commissioned three independ
ent reviews into firms’ systems and controls, while three senior
managers had agreed to fix problems and consider redress
payments. It gave no further details.
The move follows a September super-complaint from consumer grou
p Which?, which accused the FCA of failing to protect customers a
nd tolerating serious failings in the market. In response, the wat
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chdog promised to accelerate efforts to improve standards.
After an in-depth review of home and travel insurance in July, th
e FCA said it would next year do more to improve claims handling and help
customers better understand what their policies cover.
“We’ll be monitoring consumer outcomes and will continue to hold
firms and their senior leaders to account for making improvem
ents, to help build trust and make sure people get fair value insurance,” s
aid Graeme Reynolds, the FCA’s director of competition and interim director of insurance.
Rocio Concha, Which? director of policy and advocacy, welc
omed the FCA’s pledge to tackle problems with customer service, claims handling, product sales and policy terms.
But she warned: “These issues have been allowed to fester for years, so the FCA must now seize the opportunity to
take strong action to stamp out widespread bad practice and issues with how the markets are working.”
Super-complaints give certain consumer groups legal powers to raise concerns on behalf of large numbers of custo
mers that they believe have been significantly harmed by market practices.
Hannah Gurga, director general of the ABI insurer industry group, sa
id the industry was focused on driving further improvements.