The Financial Conduct Authority (FCA) has today revealed that Direct Line Group will carry out a past business review relating to the watchdog’s pricing rules. The move marks the first time a formal voluntary requirement has been agreed with a firm in relation to the FCA's motor and home insurance pricing rules.
The FCA noted that Direct Line has agreed a voluntary requirement having charged some existing home and motor customers ‘more for their renewal than they would have done if they were a new customer’. The regulatory body stated that Direct Line will carry out a review to identify all cases where a customer has been overcharged and provide appropriate redress.
Customers were notified that they do not need to do anything at this stage and that Direct Line will be contacting affected customers directly.
A report from Reuters shared a statement from Direct Line which revealed that the current estimate of the payments is in the region of £30 million pounds, “of which half was provided for within the Group’s 2022 full-year results.” In the statement, Direct Line said an error in its implementation of the FCA’s rules meant its calculation of the equivalent new business price for some customers failed to comply with the regulation.
“As a result, those customers have paid a renewal price higher than they should have,” Direct Line said.
The news caps off a busy week for the British insurance giant which announced on Wednesday that Adam Winslow – who was formerly CEO of Aviva’s UK and Ireland General Insurance business - is due to step up as its new CEO. Winslow is expected to take up his new role in Q1 2024.
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