Insurance bosses asked to sign documents confirming their firms are no longer charging loyal customers more at renewal time
Insurance bosses have been asked to sign documents confirming their firms are no longer exploiting loyal customers, The Mail on Sunday understands.
It is believed the Financial Conduct Authority has asked all chief executives of insurance companies and brokers to sign an ‘attestation’ that their company is not charging loyal customers higher premiums than new ones.
The City regulator is now poised to check data on the prices that insurers are charging new and existing customers for the same cover.
New rules: The City regulator is now poised to check data on the prices that insurers are charging new and existing customers for the same cover
If there is evidence of ‘price walking’ – existing customers being discriminated against – it will hold the individual executives liable. Offending companies will also have to suspend policy sales until they can prove the practice has been eliminated.
The regulator’s new rules on the pricing of home and car cover came in at the start of the year. But The Mail on Sunday uncovered evidence that some insurers had yet to adjust to the new regime and were still disadvantaging loyal customers.
James Daley, founder of campaigning company Fairer Finance, is a sceptic of the new regime.
He believes it discourages customers from shopping around because they mistakenly think their existing insurer will now give them a fair deal. He describes the £4.2billion figure that the regulator says insurance customers will save over the next ten years as ‘baloney’.
On Friday, the FCA told the MoS: ‘Recent data has shown encouraging signs about the effectiveness of our reforms in tackling the loyalty premium in motor insurance, with the average cost of renewal down £55.
‘We are keeping a close eye on how insurers are responding to the new rules to ensure they continue to provide value to their customers. This is especially important with the increased cost of living now affecting many consumers.’