UK watchdog to clamp down on insurance 'loyalty penalties'
LONDON (Reuters) - Britain's Financial Conduct Authority said on Tuesday it was finalising "remedies" to stop home and car insurance companies penalising loyal customers.
The watchdog said the "loyalty penalty" cost longstanding customers an extra 1.2 billion pounds in 2018.
More than four in five adults in Britain have one or more insurance products, and consumers who stay with their existing insurer at renewal almost always pay higher premiums than those who switch or negotiate, the FCA said in Sector Views, its annual review of key concerns for the year ahead.
The FCA also said high-risk retail investment products were exposing consumers to more risk than they can absorb, the FCA said.
"Some of the highest-risk products are often marketed directly to retail consumers with poor communication of the risks involved and implications that the investments are regulated, when this is not the case," it added.
Many new payments firms had been able to enter the market and grow quickly, and some of their products had offered no protection for consumers.
Sector Views are used by the FCA to shape its business plan for the coming financial year and determine whether to open new market investigations and use its powers to intervene.
(Reporting by Huw Jones; editing by John Stonestreet)
