The Lloyd’s Market Association (LMA) has published a general guidance document for the implementation of the FCA Consumer Duty, which has been gradually introduced over the past year in a series of policy announcements.
The Consumer Duty sets standards of care that firms are required to give retail customers, including that products and services are fit for purpose, offer fair value, and help consumers make effective choices.
The market has already implemented the Insurance Distribution Directive (IDD), which imposed rules requiring firms to act in their customer’s best interests.
And more recently, it implemented the FCA’s General Insurance Pricing Practices and Fair Value assessments to enhance product oversight and governance.
As a result of this, the LMA notes that insurers are in most cases already complying with many of the new Consumer Duty requirements, especially the requirement to ensure fair value.
“The Lloyd’s market is in a strong position to implement the additional requirements imposed by the FCA Consumer Duty, and the LMA is ready and primed to provide support,” said Arabella Ramage, legal director at the LMA. “As a market, we have a long history of adapting to regulatory environments and maintaining the highest standards of policyholder protection.”
“Given the prior implementation of the Insurance Distribution Directive, insurance is perhaps in a better position than many other financial services in terms of already applying the principles of the new Consumer Duty, and we will be providing further detailed guidance for Managing Agencies over the coming months,” Ramage continued.
“Nevertheless, the LMA, on behalf of its Members, will continue to engage with the FCA throughout this implementation period, provide market feedback and seek clarifications where necessary. If any of our Members have questions about Consumer Duty implementation, do not hesitate to contact Steve Morrell who has been leading this work at the LMA.”