CMA recommends one of the toughest crackdowns ever seen in insurance as it vows to do whatever it takes to bring insurers and brokers in line 

The competition watchdog has revealed more details today of how it will do ’whatever it takes’ to submit insurers and brokers into ironing out their differential pricing that treats customers unfairly. 

The Competition and Markets Authority, who today singled out insurers and brokers for their particular bad behaviour, recommends ‘name and shame’ league tables.

This would mean insurers and brokers, whose damning behaviour has been unearthed by the FCA,  publishing the size of their loyalty penalties.

The regulator hopes this would be quickly picked up by the public and mass media, meaning their reputation is hit and they are forced into behaving. 

”Reputational measures designed to put pressure on businesses can have a real impact in markets. In this case, data on the scale and size of the loyalty penalty, and which suppliers have the highest price differences, can put pressure on them to reduce this gap,” the CMA said today in its report called Tackling the Loyalty Penalty.

”Recommendation 3: Publish the size of the loyalty penalty in key markets and for each supplier, through for example an annual joint loyalty penalty report.”

The regulator is also hoping for new powers to beef up their ability to mete out substantial fines for insurers and brokers who break the law. 

In a blizzard of recommendations put forward today by the CMA, the competition watchdog also wants the FCA to strongly consider pricing intervention.

Other recommendations include action on auto-renewal; allowing organisations such as Citizens and Advice to have more involvement with brokers; getting insures and brokers to take part in a likely annual large scale pricing data survey submission to regulators;  and finally much bolder use of regulatory and enforcement powers.

The CMA will look at how its recommendations are being taken up in the next 12 months, vowing further action if needed, such as a fresh market study.

”The CMA is committed to continuing to drive this work forward to maintain momentum and ensure changes are achieved,” it said today. 

 

 

 

Topics