Secretary of State for Levelling Up, Housing & Communities Michael Gove is eager to explore all of his department’s options to get the cost of multi-occupancy buildings insurance down.
In response to the Financial Conduct Authority’s (FCA) update on the regulator’s review of the market, Gove told FCA consumers and competition executive director Sheldon Mills that the MP hopes they can collaborate to achieve this outcome.
“I am keen to review how all actors in the insurance marketplace have contributed to high premiums for leaseholders,” wrote Gove in his letter to Mills. “I welcome the work you are considering to re-align incentives for insurance brokers, freeholders, and managing agents.
“I note your request for government to consider specific statutory powers on remuneration to assist the FCA in implementation of restrictions on commissions, if required. I also acknowledge the limitations of the FCA’s regulatory perimeter, particularly for freeholders and managing agents. I will consider all routes necessary to reduce premiums, and I am hopeful that we can work together toward this goal.”
Over the past three months, the FCA has been gathering data from both insurers and intermediaries to have a better understanding of their pricing practices. The watchdog aims to identify failures in the market which may be causing harm to residential leaseholders when it comes to product distribution, as well as pricing and supply.
Gove went on to tell Mills: “I look forward to the publication of your full recommendations in July. The findings of the FCA review will be critical to developing a full understanding of the issues in the buildings insurance market. It is important that any recommendations consider all routes, whether enacted by the regulator, government, or industry, to ensure leaseholders get the value for money they deserve.”
