FCA: MS24/2 Premium Finance Market Study
FCA has published its final report which sets out its conclusions from the analysis of this market and a summary of what it has done to improve consumer outcomes under fair value rules. Overall, FCA found that the cost of paying for insurance monthly has fallen significantly since the Consumer Duty was introduced and concluded that, for both with-interest and 0% APR models, firms incur similar costs when offering monthly payments and can offer fair value. FCA states that price cap or a ban on with-interest models would not be proportionate, but notes that, where necessary, it will pursue stronger supervisory action to address concerns around the provision of fair value. Alongside the report, FCA has published an article by Graeme Reynolds on fair value (third link below).
