Responsibilities of the FCA
The Financial Conduct Authority (FCA) is responsible for regulating 50,000 financial services firms, including banks, consumer credit and general insurance firms, in the UK. It’s remit is to work to ensure that financial markets are honest, competitive, and fair to customers. They supervise, set standards for, and prudentially regulate firms to make sure they meet requirements and continue to follow rules after authorisation. The strategic objective, of the FCA, is to make sure the markets it is responsible for function well, and they measure how well they are doing using a range of metrics. The FCA is an independent public organisation funded by fees from the firms that it regulates, and they work with those firms to make sure that they achieve their objectives.
Financial services includes Insurance and specifically general insurance such as motor and home insurance.
History – Before the FCA
General Insurance Standards Council (GISC) was set up in 2000 as the self-regulatory body for the UK’s general insurance industry. It set standards but didn’t have any real teeth to deal with transgressors and was the industry policing itself. It was wound up when the FSA came into being.
The Financial Services Authority (FSA) was the agency that regulated financial services in the United Kingdom up to 2013. All insurance firms, intermediaries and brokers had to apply for authorisation from the FSA. It was illegal to provide financial services in the UK if you were not authorised. Members of GISC found it relatively easy to migrate their regulation to the FSA.
Following the financial crisis in 2008 there was some criticism that the FSA should have been in a position to do more to protect the public from financial harm. Eventually the Government decided to dissolve the FSA and to create the FCA and the Prudential Regulation Authority. The Prudential Regulation Authority (PRA) is responsible for regulating banks, credit unions, insurance firms, and investment firms. It operates as part of the Bank of England, which is owned by the UK government and is therefore governed by Parliament.
Role of the FCA in protecting consumers
The Financial Conduct Authority (FCA) protects consumers in financial services by setting rules and standards for financial firms, ensuring they treat customers fairly and prioritise customer protection. The FCA monitors firms’ compliance with these standards, and acts against those that fail to follow the rules. They also educate consumers about financial risks and warn about scams, while promoting healthy competition in the financial system. This empowers and informs consumers to make choices and switch providers based on service, quality, price, and innovation.
The FCA regulates the UK general insurance industry and has taken a number of steps over the last few years with increasing focus on expecting insurance firms to “Treat Customers Fairly” and have a consumer duty to put providing good outcomes for their customers at the heart of everything they do.
Regulation of the UK General Insurance Industry
The Financial Conduct Authority (FCA) identified poor product value, of add on products, as an area of harm in general insurance, which has resulted in poor competition and a lack of common measures of value. To address this issue, the FCA introduced reporting rules to require firms to report and publish data on value measures, including claims frequencies, claims acceptance rates, average claim pay-outs, and claims complaints as a percentage of claims. Firms are also required to ensure that their products offer fair value to customers in the target market. These rules were introduced in the FCA’s Policy Statement (PS20/9).
Reporting rules on Value Measures
This means that any add on products you have sold, such as legal protection, key insurance and breakdown cover must provide good value for money. They must be something that there is a fair possibility for you to need and that they will settle the sort of claims that they are designed to do. The FCA checks that firms are doing this by collecting data from them on a regular basis. If they find that competition is not acting in the best interests of consumers they will take further action.
Financial Services Register
This is a public record of firms, individuals and other bodies that are, or have been, authorised by us or the Prudential Regulation Authority which is overseen by the Bank of England. In the UK, nearly all financial service activities must be authorised or registered by the FCA. The Register lists all firms and individuals involved with regulated activities that the FCA currently or previously approved. You can search the register here: Financial Services Register The introduction page explains how to use the register.
Authorisation of Caravanwise by the FCA
Caravanwise is Authorised and Regulated by the Financial Services Authority. You can check our status and regulated activities on the Financial Services Register. We cannot offer advice on which caravan insurance is right for you but we do help in any way we can with information that allows you to make your own decision.