With just two months until the deadline for insurer value assessments (30 September), many brokers are telling me that insurers are still holding off on sending out the forms or requests to find out what brokers are doing on their own that could affect the value of the products, which they then need to take into consideration in the round to assess product value.
The FCA is concerned and sent a detailed update today (contact me if you’d want a copy). They believe that insurers waited until the last minute and that some only did a substandard generic job.
They are very explicit that the product should not be sold until it has been thoroughly evaluated as giving fair value.
The broker will have to identify their own role/impact of any distribution arrangements on the value of the product by the original deadline (who is in the chain and why, what they do, what they get paid for this, and how all of this enhances value to the end customer), along with anything else they do/sell (such as imposition of fees/charges and the sale of add-ons and premium finance). However, they have granted a temporary three-month grace period.
They believe that this speaks ill of the leadership and capabilities of insurers to handle change, and they had hoped for more productive communication between insurers and brokers.
In an update a few weeks ago, BIBA urged its members to actively communicate with insurers by filling out the Product Value Information Exchange Template to the best of their ability and delivering it to each insurer. However, several insurers have stated that this strategy.