The FCA has published a thematic review that looked at governance and oversight of insurance products. It has found that the industry has made progress in improving how products are designed, managed, reviewed and distributed but said it was “very disappointed” to note that firms still need to do more to show that products deliver fair value to customers and that customers are receiving good outcomes.
The review, focussed on firms’ obligations under PROD 4 involved 28 manufacturers and 39 distributors and covered 10 different general insurance and pure protection products.
Key findings include that:
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manufacturers often do not adequately assess and evidence that their products deliver fair value and good outcomes – which means that they are not identifying times when the products are not delivering;
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distributors often fail to understand their responsibilities to consider the impact of remuneration on value;
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insufficient MI means that firms cannot properly make assessments