Protecting Consumers: FCA Issues Ultimatum to Insurance Firms on Guaranteed Asset Protection (GAP) Products

The Financial Conduct Authority (FCA) has sent letters to all insurance firms to remind them of their responsibility to ensure their products are providing fair value for customers. It has also identified that Guaranteed Asset Protection (GAP) insurance products may not be providing good value for money, as only 6% of what customers pay in premiums is actually paid out. The FCA has called on firms to take immediate action to demonstrate that customers are receiving fair value, and has given them a three-month ultimatum before it takes intervention steps. Matt Brewis, Director of Insurance at the FCA, stated that the regulator is putting the consumer first and taking action to make sure they’re getting a good deal. Going forward, rules are in place which force insurers must prove to the FCA that they’re offering fair value, with new data published today.