FCA’s new rule about Renewals – are you ready?
From the 1 April 2017 the FCA rules about Renewals are changing. Here’s what you need to know.
The new rules apply to:
- Renewal invitations sent by brokers from that date onwards (not for risks renewable on that date).
- All policy types classed as personal lines, including Private Car, Motorcycle, Taxi, Commercial Vehicle and Household.
The new rules
The new rules stipulate that FCA regulated firms must provide the following when offering renewal of a policy:
- inform the customer of last year’s premium
- provide wording encouraging the customer to check their insurance cover meets their needs, and asking whether they’ve considered shopping around to find the best deal for the cover they want
- renewals invited for the 4th time (and each renewal from then on) must provide the below mandated wording to the customer: “You have been with us for a number of years. You may be able to get insurance cover you want at a better price”
The renewal premium should be calculated, including the following:
- When calculating the last year’s premium the total payable by the customer should be disclosed, including any add-ons, tax, commission etc.
- Where an MTA has occurred, the annual equivalent premium should be used in the renewal calculation which is available from your software house system.
For more information about the new FCA rules and how they may affect you click here.
Categories: Commercial Lines, Personal Lines