FCA pricing crackdown has focused on insurers, but scheme brokers are warned they are also in firing line
Scheme brokers are being warned they must urgently review their compliance in the wake of the FCA’s game-changing crackdown on dual pricing.
The FCA has left the insurance market reeling after a probe revealed insurers appalling behaviour on dual pricing and now the regulator has revealed details of potential pricing restrictions or bans.
Compliance expert Branko Bjelobaba said that if a scheme broker is renewing a customer’s premium, escalating it year-on-year, while new customers are offered cheaper deals for no good reason, then that is major problem.
Frequently brokers will have delegated authority, meaning they are given a fair amount of leeway on setting the pricing.
“In the worst case you could have a broker that manipulates pricing, through a scheme with an insurer, so the broker is to blame,” compliance expert Branko Bjelobaba said.
”Is the insurer complicit in this case? Probably not. The insurer could not spot the expensive uplifts that exploits the customer. The more vulnerable, less able such as the elderly, they are more exploitable.
“If brokers who have the ability to alter price are engaging in it, then they are bent. No doubt about. It is totally and utterly wrong.”
Bjelobaba said insurers and brokers need to urgently review and be totally clear about who is the person ultimately responsible for signing off pricing, especially with the Senior Insurance Mangers Regime, so conduct and controls are in line with regulation and the law.
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