Financial UK Watchdog Intervenes To Cut Building Construction
Reuters, April 21 in London – According to Britain’s Financial Watchdog, measures are required to stop commission misuse, thus revisions to insurance policies for flat buildings should be made.
The plan was made public on Friday in response to an assessment of the 2017 Grenfell Tower disaster in London, which claimed 72 lives and sharply raised insurance rates.
The Financial Conduct Authority (FCA) has proposed that insurers should act in the best interests of their renters and prohibit brokers from recommending policies based on commissions they receive.
The FCA said brokers are expected to immediately stop paying commissions to managing agents or freeholders of protected buildings if they do not comply with the watchdog’s fair pricing rules.
We are taking action to stop these practises, and we won’t hold back if brokers continue to flout the law, according to FCA Director of Consumer and Competition Sheldon Mills.
FCA has published an advisory report on proposals to review sales from 16 insurance brokers in apartment blocks from January 2019 to September 2022.
Financial UK Watchdog – Building Construction Insurance Costs
FCA added that average brokerage fees per policy increased by 46 per cent, with fees paid to property management agents or freeholders of more than £80 million ($99.57 million), costs ultimately borne by lessees.
According to the watchdog, it was frequently unclear whether brokers offered insurance-related services or just shared fees with the parties in exchange for advantages.
In a letter to the FCA, Government Minister Michael Gove was “outraged” by the lookout’s findings and asked the British Insurance Brokers Association (BIBA) to commit to improving its practice.
According to Gove, I think the FCA needs to move right away to impose penalties on brokers and managing agents who fail to disclose the true value of their commissions. Financial UK Watchdog
In his letter, which was copied to Britain’s competition watchdog, Gove asked FCA to hold enforcement action until parliament’s summer recess and to provide a full report by the end of October.
BIBA said it supports the changes FCA is seeking to improve transparency for tenants, and members are committed to providing fair pricing.
BIBA said in a statement that it “claims that commission increases during the review period were not a major driver of increased premium costs for lessees.” Financial UK Watchdog
Lessees can dispute incorrect pricing with transparency on insurance costs and FCA proposals.
According to the FCA, many of our renters have been negatively impacted by all of these problems, including their mental health and general wellbeing. Financial UK Watchdog
The Watchdog expects to issue final rules in Q3, with a three-month implementation period.
($1 = 0.8035 pounds) Financial UK Watchdog
