Commons Sense

House of Commons · Ministers' Questions

Financial Conduct Authority: Loyalty Penalties in Insurance Market.

Tuesday 20 December 2022 · 4 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 1 Partly answered 3 Not answered 0

Key points

  • Financial Conduct Authority introduced pricing rules in January to protect customers from loyalty penalties in insurance.
  • Government rejected an approach similar to the FCA's for energy markets due to concerns over market distortion.
  • Chancellor agrees stability is a core objective for regulators and aims to maintain high prudential regulatory standards.

Topics (select to filter)

Questions & Answers

Q1 John Penrose Con
Context

The MP is questioning the Financial Conduct Authority's measures to protect insurance customers from loyalty penalties.

Question

What recent assessment has been made of the effectiveness of the Financial Conduct Authority in protecting customers from loyalty penalties in the insurance market?

Answer from John Glen

The Government welcome the Financial Conduct Authority's pricing rules, introduced in January this year, which require insurers to offer a renewal price no greater than the price the firm would offer to a new customer for the same policy. The Financial Conduct Authority has confirmed there is no evidence of widespread non-compliance with those rules.

Answered
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Q2 John Penrose Con
Energy
Context

The MP contrasts the effectiveness of FCA measures in insurance markets to the less successful energy price cap.

Question

Given that the Treasury is spending vast amounts on energy subsidies, will my right hon. Friend speak to BEIS about replacing the failed energy cap with a version of the FCA's approach as soon as energy prices return to normal?

Answer from John Glen

I am very happy to look at that question further. The Government previously considered, but rejected, asking Ofgem to implement a relative rather than an absolute price cap in energy markets because it was judged that it would distort competition in the fixed-term tariff market.

Partly answered

Not addressed: Replacing the failed energy cap with FCA's approach

How: Because It Was Judged That It Would Distort Competition

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Q3 Stewart Hosie SNP
Economy
Context

The MP is concerned about the timeline of consultations regarding financial services regulation and fears lessons from the financial crash might be overlooked.

Question

Given that many consultations closed very quickly, how can we be convinced that the painful lessons of the financial crash have not been forgotten?

Answer from John Glen

For four and a half years, I was the Economic Secretary to the Treasury, and many of those reforms were baked up over a lot of consultation with industry over many months. The Edinburgh reforms represent an incremental advance on those reforms and have high prudential regulatory standards very much at their core.

Partly answered

Not addressed: The quick closure of consultations

How: Many Of Those Reforms Were Baked Up Over A Lot Of Consultation With Industry

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Q4 Stewart Hosie SNP
Economy
Context

The MP is concerned about the potential weakening of regulatory standards and international confidence in UK's financial system.

Question

Given the intention to review capital requirements, how will the Chancellor ensure the regulatory focus on stability is maintained?

Answer from John Glen

I heartily agree with its conclusions. Stability is at the core of the regulators' objectives, but also developing frameworks in line with expectations so that we can remain a world-leading global hub for financial services.

Partly answered

Not addressed: Ensuring regulatory focus on stability remains unchanged

How: But Also Developing Frameworks

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