FCA Pricing Practices – an update on our approach and actions
Many of you will be aware of the significant impact of FCA Pricing Practices - upcoming legislation that impacts both commercial and personal lines business. We wanted to update you on some of the detail and what steps we're taking to meet the requirements.
What's the Pricing Practices review?
The FCA concluded a review of general insurance pricing practices in September 2020. Following this review, they're introducing a set of new regulations centred on providing fair value to consumers. In summary this requires:
- Additional Product Governance requirements to be in place by 1 October 2021 (for both personal and commercial lines - excluding reinsurance).
- Premium finance and Autorenewal requirements to be in place by 1 January 2022 (General Insurance Retail – consumer).
- Pricing remedies to be in place by 1 January 2022. The FCA is offering a ‘window’ until 17 January 2022 to complete this (for personal lines home and motor).
Our approach and action relating to the Product Governance Rules
We have well-established Product Oversight and Governance controls in place to provide assurance that the activities undertaken throughout the lifecycle of a product are managed to an acceptable standard:
- For customers - we want the general insurance products we manufacture to provide fair value, where products can be accessed for a fair price and used as customers would reasonably expect.
- For businesses – we uphold the high reputational and conduct risk management expectations of today’s insurance firms, adhering to legal and regulatory requirements and managing operational risks to industry standards.
We have already made the necessary changes to our process in terms of additional Product Governance requirements that are to be in place by 1 October. You can find our revised Product Approval Process here. You can also find our Target Market Statements on our Aviva Broker site. For commercial lines they can be found here, for personal lines they can be found here.
We'll continue to provide updates with our activity for implementing the other Pricing Practices rules and any guidance that will help you to ensure you can meet requirements too. Should you have any questions in the meantime, then please contact your Aviva Sales Manager.