The Financial Conduct Authority (FCA) has reminded insurance firms to review the value of their products in light of the impact of the coronavirus pandemic.
The regulator wants firms to pay particular attention to products that have not provided benefits or where changed circumstances mean the product now provides little or no utility to customers.
Firms are expected to complete their reviews and decide what action to take by December 3, such as providing alternative benefits, reducing premiums or partial refunds of premiums paid where products have not delivered the intended value to customers.
The regulator first published its guidance in June, directing insurance firms to consider the impact of coronavirus on the value of their products.
At the time it defined product value as “what the customer is paying for and the quality of the product or service it is intended they receive”.
For example, the guidance cited that coronavirus may mean firms “are no longer able to provide expected contractual benefits, either in the expected form, to the expected timeframe, or at all”.
This could include some medical cover where customers cannot access certain benefits, it said.
The FCA said today it had reviewed its guidance, but did not propose to make any updates at this stage.
It warned the effects of coronavirus could continue to affect the value of insurance products and cause harm to customers, and that firms should monitor this risk as part of their normal product governance processes and act where necessary.
It stated: "We said that firms should review their product lines and act where products have not delivered the intended value to customers. This could include providing alternative benefits, reducing premiums or partial refunds of premiums paid.
"Firms should complete their coronavirus related review of product lines and decide what action to take by 3 December 2020."
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