S&P Says FCA Likely To Act On Insurance 'Loyalty Penalty'
Law360, London (February 12, 2020, 6:16 PM GMT) -- The Financial Conduct Authority is likely to directly intervene in the insurance market to minimize the impact of the “loyalty penalty” on vulnerable customers, ratings agency Standard & Poor’s warned Wednesday.
S&P said the City watchdog would most likely take a hard line in the next month on the controversial pricing practices of home and motor insurers.
The FCA said in its interim report last October that 6 million insurance customers are being overcharged as much as £1.2 billion ($1.55 billion) a year through so-called dual pricing.
Most insurers deliberately underprice first year premiums, then increase rates every year on renewal. One...
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