ARAG engages with FCA to reduce insurance broker burden
Authored by ARAG
While there has been plenty of talk about the FCA’s new rules on pricing and the reporting of value measures data, little of it has focussed on the sale of ancillary products or “add-ons”, aside from some mention of the fact that premium finance will be classed as an add-on.
ARAG has engaged with the FCA throughout the consultation process and has applied for a modification of the FCA Handbook rules which, in simple terms, would mean that ARAG will be entirely responsible for reporting value measures data for all legal expenses insurance and assistance products sold by our distribution partners. Under the current requirements of the published Policy Statement, only legal expenses reporting would come under ARAG’s responsibility, with all assistance business under scope being the responsibility of the distributor.
If the application is granted, this would obviously remove a potentially huge administrative burden from our broker partners, who would not then need to collate this data and transfer it to the underwriters of the primary insurance products.
We think it would also reduce the risks associated with data duplication, helping to preserve the accuracy of the data that is submitted to the FCA.
We hope to hear from the FCA about this waiver application soon and will share the decision and relevant information with partners, as soon as it is available.
The first reports required - with data for the period from 1st July 2021 to 31st December 2021 - are due to be submitted to the FCA no later than 28th February 2022.
We’ve produced a more detailed Bulletin which spells out the new rules, explains what action ARAG has taken and what responsibilities fall to partners selling add-on products. We have also revised our Product Oversight and Governance Policy to reflect the new responsibilities laid out in the GIPP Policy Statement and updated all of our Target Market Statements.
Please look out for further communications on this important subject, but if you have any questions in the meantime, then don’t hesitate in getting in touch with your ARAG account manager who will be happy to help.
Disclaimer - all information in this article was correct at time of publishing.
ARAG UK is a specialist legal insurance provider and is part of the internationally recognised ARAG Group which serves 14 countries worldwide.
Providing several emergency assistance insurance products and an innovative range of Before-the-Event and After-the-Event legal insurance products and services, ARAG UK prides itself on its client-focused approach. This has been recognised by the industry following the results of the Insurance 360 Legal Expenses Insurers Study in which ARAG UK was voted 'best legal insurance provider'. youTalk-insurance sharing ARAG UK insurance news.
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