The Chartered Insurance Institute (CII) is calling for insurance professionals to “to take greater control of [their] destiny,” following the Financial Conduct Authority’s (FCA) latest Consumer Duty.
Published on July 27, it establishes a new Consumer Principle that requires financial services firms to act to deliver “good outcomes” for retail customers. It also lays out cross-cutting rules which offer greater clarity on the FCA’s expectations and helps firms interpret the four outcomes the regulator expects from them – these outcomes relate to products and services; price and value; consumer understanding; and consumer support.
The new chief executive of the CII, Alan Vallance, believes that the Consumer Duty presents an opportunity for insurance professionals to win even greater freedom. He shared his thoughts during the CII’s Shaping the future together conference on September 15.
“With the new Consumer Duty, the FCA has said it wants to measure outcomes rather than inputs,” said Vallance. “This means that professionals who can demonstrate the value they are providing for consumers could win the freedom to do what works rather than being micro-managed by prescriptive regulation.”
“I think there is a real opportunity here for us to take greater control of our destiny or be passive and wait for the regulator to act,” the CEO added.
Also present during the conference was Ian Searle, head of department, consumer and retail policy of the FCA. Searle said that the FCA was looking for evidence of the outcomes that consumers will get and work to tackle groups that are not meeting the optimal results expected from the profession’s services and products.
“Hopefully in the long-term, this shift should give us scope for a less prescriptive, more flexible regulatory framework overall,” Searle explained. “I hope you’ll all agree that the Consumer Duty, as a whole, is an excellent opportunity to improve trust and get that customer focus, which many of you are already striving for - and deliver good outcomes for customers.”
Searle also noted that financial service firms, their boards and management, should work with the FCA to “really set the right culture to properly embed the duty in their organisations,” so that their staff can focus on delivering good outcomes.
