(Removes incorrect ownership reference in paragraph 6, in this April 3rd story)
LONDON (Reuters) - Roadside recovery and insurance group RAC is contacting breakdown policy customers after a warning from Britain’s markets watchdog that it had broken transparency rules governing renewal documents.
Under regulations introduced last April, companies have to clearly show a proposed renewal premium alongside the premium a customer paid the previous year. They should also encourage customers to shop around.
The Financial Conduct Authority (FCA), which last year reprimanded home and motor insurer Admiral (ADML.L) over its renewal policies, said on Tuesday the RAC was the latest company to agree to contact affected customers for breaching rules on information disclosure.
“It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules,” said Jonathan Davidson, an executive director of supervision at the FCA.
More than one million RAC customers might not have had the right information to decide whether to seek a better deal elsewhere and could be due compensation, one source familiar with the matter said.
The RAC said it would contact affected customers over coming months.
A spokesman said the company recognised that some information in its letters had not been clear enough.
“While our breakdown policy renewal documentation did accurately contain all the necessary information, we recognise that some of the key information in our letters was not as prominently displayed as it should have been,” he said.
Admiral apologised last year after the FCA said it gave inaccurate information to some customers who renewed policies.
Reporting by Kirstin Ridley and Carolyn Cohn; Editing by David Holmes and Mark POtter