2021 is certainly looking to be a busy year in terms of legislation changes. Here we take a closer look at new measures proposed by the Financial Conduct Authority (FCA) for home and motor insurance and what Strong Customer Authentication (SCA) will mean for you, your customers, and the industry.
General Insurance Pricing Practices
Last year, the insurance industry watched with bated breath as the Financial Conduct Authority (FCA) announced it would be consulting on the harms identified in the General Insurance Pricing Practices Market Study.
The FCA concluded the home and motor insurance markets were not working in the best interests of the consumer and would therefore be its primary focus. As a result, Open GI is now consulting closely with the FCA on a raft of changes to correct these identified issues.
The FCA’s proposal
The FCA is proposing four measures to improve competition and ensure consumers are offered fair value products in the future. These measures include pricing remedy, product governance, auto-renewal and reporting requirements.
The consultation period has now ended, and BIBA is lobbying for extended timescales to allow the industry and software houses time to apply the changes that are proposed. As previously mentioned, we are working with the FCA and echo BIBA’s sentiments for additional time to investigate and implement the proposed changes.
Despite this, the changes are going to impact our industry, as well as the schedules and services we provide. It will also impact you and how you service your clients. It’s important therefore that we hear your views on this topic, which is why we are now in the process of creating a focus group. This Group will allow our customers to actively participate and share their findings and interpretation of the consultation paper, which will then help us to shape our solution.
We are currently in discussion with each of our card payment providers regarding Strong Customer Authentication (SCA) legislation. SCA is an additional European regulation designed to enhance the fraud protection of online payments and will change how you and your clients confirm identity when making purchases online.
It is the method of authenticating an individual based on at least two discrete elements of the following three categories:
The UK deadline for implementation is 13th September 2021, which is when card issuers will begin to start declining any ecommerce led transaction which is not SCA compliant.
We are working hard to ensure any required changes to our software will be made by 13th September 2021.