Investigations conducted by the Financial Conduct Authority (FCA) have unveiled evidence of financial mis-selling in the UK’s insurance sector – which could span across some 5,100 intermediaries of 400 UK insurance companies.
The FCA is weighing up whether further regulatory action is needed, after “significant shortcomings” were found in the ways in which insurance products were commonly sold to consumers by ‘middlemen’ or ‘appointed representatives’ failing to comply with, or fully understand, the FCA’s rules.
“Poor customer outcomes” were highlighted in the car, home and travel insurance sectors – where the FCA believes thousands of consumers may have been mis-sold insurance products which they:
- May be unable to claim under
- May not need
- Received limited or unsatisfactory information about at the point of purchasing.
The watchdog has already reportedly taken action against five unnamed firms, after a survey of 190 insurance companies across Britain found that more than 50 per cent of firms could not consistently show they had effective measures in place to manage the risks arising from their appointed representatives’ activities.
The FCA’s Jonathan Davidson said: “General insurance is a large and important sector and we are concerned about the potential for customer detriment arising from the lack of oversight of appointed representatives.
“We found widespread examples of poor practices across the sector. In many cases firms were simply failing to understand and manage the risks arising from their appointed representatives’ activities.
“All principal firms need to consider these findings and look again at their practices,” he added.
Carter Lemon Camerons LLP Solicitors is a City law firm with experience in providing legal services to businesses and victims of financial mis-selling. Unlike many City practices we are happy to act in smaller private legal matters, bringing the same care and consideration as we do to large commercial matters. For more information about our swaps and financial mis-selling services, please contact Seamus Smyth or telephone: 020 7406 1000.