ILC ARTICLE

FCA outlines Consumer Duty expectations

7th February 2023

The FCA has stepped up its support for companies preparing for the implementation of the Consumer Duty regulations, which come into force on 31 July.

Compliance to Consumer Duty will require all organisations to be able to prove that they are making customer outcomes their priority in every area of business.

Alongside a schedule of regional events for SMEs, the FCA has also written letters to specific sectors outlining their expectations as businesses continue their transformation.

Among those sectors that have been directly addressed is General Insurance, with the FCA identifying three areas of particular focus. They are product governance (ensuring companies offer products and service that deliver fair value), communication, and claims processes and outcomes.

The letter says, “For consumers, the experience of making a claim will generally be when the product’s value and service are put to the test. Firms should ensure they support consumer understanding and deliver good outcomes throughout the claim journey, through timely and appropriate communications. We expect firms to ensure customers are at the centre of the claims process, so that unreasonable delays to claims processing are avoided and fair claims settlements are made.”

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said, “We want to thank firms for the hard work they’re putting into embedding the Duty. We were encouraged to see many examples of good practice in our review of implementation plans and found that many firms are embracing the shift that the Consumer Duty brings.

“Putting good outcomes for customers at the heart of firms’ strategies and business objectives will build trust and modernise how we regulate financial services.

“Leaders have a key role to play here. We have a world-leading financial services industry which serves its customers, colleagues and shareholders well through competition, innovation and leveraging talent. We want to see boards and senior management further embed the interests of customers into their firms’ culture and purpose.”