FCA investigation will enforce that UK insurance is not a commodity, says Eversheds
Eversheds partner Jeremy Irving has commented on news that the Financial Conduct Authority (FCA) is launching an investigation into insurance price comparison websites.
Noting that price comparison websites (PCWs) have been subject to regulatory query, scrutiny and comment for a number of years, Iriving said: ‘The FSA [Financial Services Authority] as it was and the FCA now has made it clear that consumers need to be aware that the mere label or packaging of an insurance policy is not determinative of its terms, such as exclusions, and thus whether the policy is a suitable tool to manage a particular risk or set of risks.’
He said that the commercial reality is that insurance is sold on a high-volume and high-speed, almost commoditised, basis.
He added: ‘Centuries of case law show that the construction and response of a particular policy is dependent on specific terms and, as highlighted in recent years, specific circumstances or “factual matrix”.
‘The FCA is re-emphasising that an insurance policy should not be considered a commodity, and requires more detailed and comprehensive consideration than consumers seem to be carrying out via PCWs.’
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