General Insurance – Are Customers Treated Fairly? Thematic Review 2018

Summary

This is the GFSC's 2018 thematic review report examining whether general insurance intermediaries in the Bailiwick of Guernsey treat customers fairly. It combines findings from an industry questionnaire, a public survey, a website review and onsite visits to assess how firms have implemented the Code of Conduct for Authorised Insurance Representatives (the AIR Code) and related conduct requirements. The report is informational and diagnostic rather than a new binding rule, but it sets out findings and areas where the Commission expects improvement.

• Scope: Covers licensed general insurance intermediaries (advising on or arranging general insurance for the public, and firms with fewer than 250 employees) in Guernsey and the UK writing Bailiwick business.
• Topics reviewed: Adoption of the new AIR Code, firm culture, disclosure practices (including prior year premium disclosure), insurance add-ons, training and competency, remuneration, vulnerable customer policies, terms of business, renewals, claims handling, and complaints recording, reporting and handling.
• Overall finding: Bailiwick general insurance brokers are, as a whole, making a genuine and largely successful attempt at compliance, but standards vary by firm and topic, with specific areas for improvement identified in each chapter.
• Commission expectation: The Commission expects all licensees to benchmark their own practices against the report's findings and make material improvements where weaknesses are identified.
• Additional consumer matters: An appendix addresses public queries not within the report's main scope, including insurance premium tax, the recognised insurers regime for overseas insurers writing Bailiwick risks, and exemptions for incidental (non-regulated) insurance sales, such as travel agents selling travel insurance.

The document does not introduce new legislative rules but reinforces existing obligations under the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law 2002, the Principles of Conduct of Finance Business, the Insurance Intermediaries (Conduct of Business) Rules 2014, and the AIR Code, and signals that the Commission will monitor firms' progress against the identified areas for improvement.

Key obligations

• Licensees should review their own policies, procedures and customer-facing practices against the findings and areas for improvement identified in the report and take steps to make material improvements where weaknesses exist.
• Firms must continue to ensure Authorised Insurance Representatives (AIRs) comply with the Code of Conduct for Authorised Insurance Representatives when advising on or arranging general insurance contracts.
• Only a registered AIR may advise on or arrange a contract of insurance by way of business, as required under section 16 of the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law 2002.
• Firms must comply with the Insurance Intermediaries (Conduct of Business) Rules 2014 and the Principles of Conduct of Finance Business in their dealings with customers.

Applies to

general insurance intermediaries, insurance managers, Authorised Insurance Representatives (AIRs), insurance brokers