FCA confirms new insurance rules to prevent 'price walking' in home and motor industries
The Financial Conduct Authority has confirmed that it is introducing a new package of measures to regulate home and motor insurance quotes.
The FCA is today (28 May) implementing the new rules, which it says will improve competition in the sector and protect customers from loyalty penalties.
The rules will ensure that renewal quotes for existing home and motor insurance consumers are not more expensive than they would be for new customers.
The practice, known as price-walking, is when insurance providers increase prices for existing customers year on year, meaning that it is often cheaper to switch providers.
The regulator said that the rules mean that it is likely that firms will no longer offer “unsustainably low-priced” deals to new customers, but that the new measures will save consumers around £4.2bn over 10 years.
Sheldon Mills, executive director of consumers and competition at the FCA, commented: “These measures will put an end to the very high prices paid by many loyal customers.
“Consumers can still benefit from shopping around or negotiating with their current provider - but won’t be charged more at renewal just for being an existing customer.
“We are making the insurance market work better for millions of people. We will be watching closely to see how the market develops in the future and to ensure firms continue to deliver fairer value to consumers.”
The new rules will come into effect at the beginning of next year.
Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →
Enjoy the read? Get Bdaily delivered.
Sign up to receive our popular morning National email for free.