Financial Conduct Authority
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FSA concludes its review of insurance comparison websites
A further Financial Services Authority (FSA) review of insurance comparison websites has found that many sites have made significant improvements and are consistently providing clear, fair and not misleading information, but some firms need to go further to address a few specific concerns.
The FSA visited a sample of the firms responsible for the 17 websites that were assessed during the initial review and found that many of them had made improvements to their websites and processes. However, the FSA has identified two specific areas where some firms need to make further improvements:
- Obtaining better information from insurers about the level of excesses that apply to insurance policies; and
- Making more clear the assumptions about consumers' needs and circumstances that some websites use to obtain quotes.
In addition, the FSA carried out a review of aggregator firms’ advertising and found the vast majority of firms have clear, fair and not misleading adverts. In a small number of cases, the FSA found a lack of clarity in some of the terms used, and adverts which could give consumers a misleading expectation of the firm’s market coverage and the amount they could save on insurance premiums.
Dan Waters, the FSA’s director of retail policy and conduct risk, said:
“We are pleased that firms have made improvements in the information they provide. But it is imperative that all comparison websites provide clear information so that consumers can make informed decisions. We have contacted all websites involved in our review, to set out our findings and the standards we expect. Where needed, we are requiring firms to take prompt action to address our remaining concerns.
“We would certainly encourage people to shop around to find the best insurance deal for them, and recognise that many people use comparison websites to do this. It is important to reiterate that people should compare what is covered by a policy, to ensure that it meets their requirements, and not just focus on the price.”
The FSA has given detailed feedback to the firms it visited and written to all other websites involved in the review. As appropriate, it requires firms to take any remedial action necessary to ensure that website users are consistently treated fairly. The FSA will continue to keep these sites under review to make sure that they take steps to meet the standards it expects, and will take direct action if firms fail to do so.
The FSA’s consumer website – Moneymadeclear – provides help for consumers on purchasing insurance through comparison websites.
Notes for editors
- The FSA’s report ‘Review into insurance comparison websites’ was published today.
- The FSA’s report on the initial phase of its review 'Review into general insurance comparison websites' was published on 8 May 2008.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.