The Financial Conduct Authority (FCA) has revealed a series of rule changes that have been warmly received by the British Insurance Brokers’ Association (BIBA). This announcement, outlined in the FCA’s Policy Statement, marks a notable shift towards increased transparency, empowerment of leaseholders, and a commitment to address fire safety concerns.
One of the key changes is the introduction of policy stakeholder status for leaseholders, a move that is set to provide them with a more influential role in decision-making processes regarding their residences. Furthermore, the FCA’s increased transparency requirements for insurance arrangements and remuneration have been lauded by BIBA as essential for ensuring fairness within the sector.
In conjunction with the FCA’s policy statement, BIBA has embarked on a comprehensive initiative designed to assist its members in showcasing the fairness of their services in this domain. At the heart of this initiative lies the creation of a Fair Value Assessment Framework. This framework offers BIBA members a flexible tool that allows them to articulate, measure, and substantiate the value they provide. It encompasses both the commission they retain and any commission shared with freeholders and property managing agents (PMAs) for insurance-related activities.
BIBA’s has also introduced a new member pledge. This pledge mandates that BIBA members sign up to uphold important commitments concerning remuneration practices for residential buildings exceeding eleven metres in height, particularly those grappling with fire safety concerns.
BIBA is also in collaboration with the Association of British Insurers (ABI) and McGill & Partners to launch a fire safety reinsurance facility later this year. This facility is envisioned as a solution to enhance risk capacity for medium and high-rise residential buildings confronted with fire safety issues. By providing insurers with the means to deploy additional risk capacity, the scheme aims to reduce the need for expensive excess of loss reinsurance placements. This, in turn, will work towards diminishing overall premiums for these buildings.
In summary, the FCA’s rule changes and BIBA’s concurrent initiatives represent a concerted effort to enhance fairness, transparency, and fire safety within the residential multi-occupancy building sector, ultimately benefitting both residents and the insurance industry.