The UK’s Financial Conduct Authority (FCA) revealed in an interim report its plans to ban companies from increasing the prices for existing customers, a practice known as “price walking” or the “loyalty penalty”, after finding that millions of people overpaid when renewing their insurance last year. The regulator concluded that customers who were initially lured in by attractive “new business” discounts were regularly subject to rapid annual price increases, effectively punishing them for remaining loyal to their insurer.
The FCA’s interim report, released the morning of October 4, 2019, into its market study on general insurance dual pricing including a review on the pricing of car and home insurance in the UK market.
“This is a very significant regulatory development. It has been anticipated for some time and many of the FCA’s proposals are not unexpected. But they represent an ongoing shift towards pricing regulations which could transform the way financial services in the UK and the rest of the world operate.
When the FCA obtained its competition-related powers following the financial crisis, few people expected that it would move so smoothly and quickly into the area of pricing and price control. This latest development illustrates how prepared it is to do that.”
For the full article, visit here.