Modern Insurance Magazine Issue 62

INTERVIEWS
DOING THE
RIGHT THING
As the insurance industry
falls into step with
new Consumer Duty
regulations, Modern
Insurance Magazine sat
down with Matt Brewis,
Director of Insurance at
the Financial Conduct
Authority (FCA), to
discuss preparations for
the new guidance, the
regulator’s key areas of
focus at the moment, and
the associated challenges
faced by the industry in
relation to adoption and
compliance.
Hi Matt, thanks so much for your time today!
Q This edition of Modern Insurance Magazine focuses on the
new Consumer Duty, which came into effect for existing
products and services on 31st July 2023. How does your
role specifically focus on an industry understanding of
these new requirements?
A
I’m responsible for overseeing regulation within the full
insurance ecosystem. Every part of the market has its own
unique set of operations, with different roles to adopt
when it comes to bringing new rules into force. General Insurance,
for example, saw the introduction of the Insurance Distribution
Directive in 2018, the key components of which form part of our
new Consumer Duty.
Arguably, this area of the sector has had plenty of time to get their
head around what we’re doing here in comparison to other areas of
financial services. My role has involved preparing the team for the
implementation of the new Consumer Duty, as well as guiding the
industry as much as possible when it comes to our own priorities
under the new regulations. We’ve done this through thematic
reviews, keynote speeches and interviews, published guidance, Q&A
sessions - you name it! We’re aiming for complete transparency
in our instruction and direction, particularly when it comes to
addressing areas where we want to see the most improvement.
Q
A
I know that your team spent a large part of last year
carrying out thematic reviews ahead of the regulations
coming into place. What were the standout areas of
this work?
Yes, on the back of these thematic reviews, our latest set
of publications informs the industry of our key focus and
priorities. ‘Fair value’ is a standout area and key theme
running throughout all areas of our new guidance. Do the products
on offer truly make sense for consumers?
We’ve still found weaknesses, despite focusing some of our reviews
on existing Product Governance rules - as opposed to the new
Consumer Duty, which is, of course, one step further. That’s why our
focus on ‘fair value’ continues to be emphasised. Take Guaranteed
Asset Protection (GAP) insurance as one example. Our stance
asks insurers to question whether the product on sale genuinely
offers value to the consumer, when a disproportionate amount of
premiums received frequently contribute to sales commission.
When we start to consider life insurance, service standards
and transformation are also core issues for us. Many firms are
12 | MODERN INSURANCE