The Financial Conduct Authority (FCA) has published its final report into the pricing of home and motor insurance, with the watchdog voicing concern regarding the state of the market and recommending significant reform.
The new measures will seek to enhance competition, ensure customers receive fair value and increase trust in both markets.
The FCA is proposing, when customers renew their insurance policy, that customers pay no more than what they would if they were new to their provider through the same sales channel.
Among the other new measures include: product governance rules requiring firms to consider how they offer long-term fair value to all insurance customers, requirements on firms to report certain data sets to the FCA and making it simpler to stop automatic renewal across all general insurance products.
Christopher Woolard, interim chief executive of the FCA, said: “We are consulting on a radical package that would ensure firms cannot charge renewing customers more than new customers in future, and put an end to the very high prices paid by some long-standing customers.
“The package would also ensure that firms focus on providing fair value to all their customers. We welcome feedback on the proposals.”