Insurance Sector Poised For Pricing Upheaval Under FCA Plan

Law360, London (September 22, 2020, 4:11 PM BST) — The U.K.’s insurance sector is facing potentially cataclysmic changes in coming years from a ban on the so-called loyalty penalty in which customers who don’t switch frequently see their rates jump over time, a move that could save billions for vulnerable, […]

Law360, London (September 22, 2020, 4:11 PM BST) — The U.K.’s insurance sector is facing potentially cataclysmic changes in coming years from a ban on the so-called loyalty penalty in which customers who don’t switch frequently see their rates jump over time, a move that could save billions for vulnerable, long-term customers.

After a two-year wait, the Financial Conduct Authority published on Tuesday its widely anticipated remedies for the practice, which it said has resulted in 6 million customers being overcharged an estimated £1.2 billion ($1.5 billion) a year for their insurance.

From the third quarter of next year, barring any last-minute changes, insurers will no longer be able to…

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