Legal & General Investment Management has sent a value for money questionnaire to advisers on the back of new rules by the regulator.
The survey, seen by FTAdviser, was in relation to new rules and guidance introduced by the Financial Conduct Authority on general insurance pricing practices (PS 21/5).
Last year, a market study found that the home and motor insurance markets were not working well for all consumers.
“While many people shop around, many loyal customers are not getting good value. We found that 6mn policy holders paid high prices in 2018 – if they paid the average for their risk they would have saved £1.2bn,” it said.
The new rules by the FCA have added clarity about the steps both firms and distributors need to undertake and the level of cooperation required in order to carry out value for money assessments effectively.
In the survey, L&G said: “In particular we (as is currently the case) need to assess our distribution arrangements for fairness, and whilst this is an aggregate review undertaken at product level where unfairness is identified (including at individual customer / distributor level) we will take appropriate corrective action.
“This survey will support us in collecting information to carry out VFM assessment. The data will be used in accordance to the data protection policy of Legal & General.”
The questionnaire, which took three minutes on average to complete, asked firms about the list of activities that explain the service they provide to protection customers.
It asked whether they are introducers, providing advice, facilitating a sale or telephone sales.
Another survey question asked: “Apart from any commission we pay you, does your firm, or any other party in the distribution arrangement; such as an appointed representative, receive any remuneration directly from the customer linked to a protection policy?”
Firms were also required to confirm that the remuneration anyone in the distribution arrangement receives (other than L&G) when arranging a L&G protection policy, is consistent with the relevant regulatory obligations under the FCA handbook.
A spokesperson for L&G said: "Legal & General shared a questionnaire with distributors working with our protection business to help ensure we meet the requirements of some new FCA rules.
“This was sent to directly authorised firms in tranches between October 2021 and June this year. The responses are being assessed internally but, to date, no issues have been identified that require any further action.”