LONDON (Reuters) - Britain’s Financial Conduct Authority (FCA) is to investigate the sale of insurance with products such as cars or holidays, exercising new powers to boost competition.
FCA Chief Executive Martin Wheatley will announce the study of the market for so-called insurance add-ons at an industry conference in London on Tuesday.
The FCA said the investigation will focus on whether sales to consumers, who are often offered insurance against breakage or loss immediately after buying a new product, offer value for money.
After the loan insurance mis-selling scandal that came during the Financial Services Authority’s (FSA) watch and has so far cost the industry nearly 9 billion pounds ($13.4 billion), the newly formed FCA is reviewing sales practices in several areas of the sector.
The FCA is examining areas including mobile phone protection, claims handling and the pricing of automatic policy renewals on home and motor insurance.
Unlike its predecessor, the FCA has the power to improve competition and protect consumers by banning or changing products.
“Our new competition duty is the single most significant change in our objectives as a regulator,” Wheatley will tell delegates at the Association of British Insurers conference.
“It means that we don’t just wait for problems before we try to promote competition in the markets we regulate.” ($1 = 0.6695 British pounds)
Reporting by Chris Vellacott; Editing by Laurence Fletcher and David Goodman