4299 Altus Insurance Whitepaper FINAL SPREAD - Flipbook - Page 28
Chapter 5: Regulator/Governance
Landscape
We cannot ignore the impact that regulation and compliance can have on a
company’s modernisation e昀昀orts; nor can we ignore the imperative it creates
for modernisation. The Prudential Regulation Authority (PRA) and the
Financial Conduct Authority (FCA), in particular, have become much more
active, invasive and demanding in recent years, as they seek to ensure greater
market stability and value for customers.
Data is the key to compliance
“Does regulation stop
modernisation in its tracks?”
From the introduction of the Insurance Act 2015 to the
arrival of Consumer Duty rules in 2023, the last ten
years have delivered a series of signi昀椀cant changes
to the regulations governing insurance companies
and witnessed a distinct swing towards a more
interventionist approach.
The Insurance Act 2015 brought signi昀椀cant changes,
speci昀椀cally around the legal framework governing
insurance contracts. It paved the way for the
modernisation of many of the rules that now govern
how insurers and their customers interact, particularly
in regard to the duty of disclosure, risk assessment,
and the remedies available to insurers for noncompliance.
These changes, though, have directly impacted the
underwriting process, creating a greater need to
evaluate risk levels. Ten years on, has the burden
of proof shi昀琀ed too far in favour of the customer?
In recent years, there has been a marked shi昀琀
towards a more hybrid approach to regulation. The
FCA continues to be a principles-based regulator
but increasingly, it is applying strict rules where it
believes intervention is necessary to prevent harm.
With those new rules come new reporting demands,
demands that can only be met with data and the
insight it delivers.
Rules Based
Principles based
Prescribes what
result must be
achieved and the
speci昀椀c method for
doing so
Prescribes what
result must be
achieved but is
neutral to the
method
That insight is crucial to enable compliance with the
General Insurance Pricing Practices, introduced in
2021, and signi昀椀cant new reporting requirements
have arrived on the back of several new rules:
• A ban on price-walking for existing customers or
introductory prices for new ones
• Greater transparency on pricing, administrative
charges and fees
• A requirement to complete a fair value assessment
for every policy sold
• Ongoing monitoring of all the above, and regular
product reviews
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