On Monday, Britain’s Financial Conduct Authority (FCA) announced it would punish house and vehicle insurance for failing to help suffering consumers.
The FCA said a sector examination found some acceptable practices but that insurers took a long time to handle complaints and give unfair settlements.
“The regulator discovered instances of motor insurance customers being offered a price lower than their car’s fair market value after it had been written off, which is against FCA rules,” the watchdog said.
“We are taking action against those firms who may have broken our rules,” the FCA said without specifying punishments or entities.
The Association of British Insurers said the FCA study shows insurers are helping clients in tough circumstances.
“On motor insurance alone in the first quarter of the year, insurers paid put 2.4 billion pounds, the highest quarterly payout since our records began in 2013,” an ABI representative said.
The FCA said it told companies to fix bad behavior and offer reparation.
“All firms are aware that we have a full range of regulatory tools at our disposal if necessary remedial action is not undertaken,” it added.
The FCA can fine corporations, ban employees, and increase oversight.
“Timely and fair claims handling is especially vital during the cost of living squeeze,” said FCA executive director for consumers and competition Sheldon Mills.
The watchdog also advised insurers on helping struggling consumers.
The FCA said companies need to identify what data they use to assess customer outcomes under stronger consumer responsibility regulations coming into force throughout the financial industry at the end of July.
