BIBA welcomes CMA extension
The British Insurance Brokers’ Association (BIBA) has welcomed the news that the Competition and Markets Authority (CMA) has extended the deadline for the implementation of the protected no claims bonus information remedy until the 1 August 2016.
The move follows intense lobbying from BIBA and overwhelming evidence submitted from across the industry, led by BIBA, that their original timescale of September 2015 was unachievable and could lead to distortion of competition, providers being locked out of the market and customers losing the benefit of protection.
Graeme Trudgill, BIBA’s executive director, said, ‘This is a big win for BIBA, customers and our motor panel who have worked hard to achieve this revision and we are pleased that the CMA has acknowledged our evidence. It has taken more than two years to reach the end of this review and although we’ve had a big win on this issue, some of the other outcomes are a bit of a mixed bag.’
BIBA is dismayed that compliance and monitoring reporting for private motor insurance providers will be to the CMA and not to the Financial Conduct Authority (FCA) alongside other regulatory reporting that brokers already make meaning an increased cost of regulation.
Steve White, BIBA’s chief executive, commented, ‘It is ridiculous that brokers selling private motor insurance will be expected to report to CMA in addition to their FCA reporting requirements. This move will result in additional burden and cost to brokers. We already have the highest cost of regulation in the world and this is not in the spirit of the Government’s Red Tape Challenge.’
In addition the CMA has banned wide Most Favoured Nation (MFN) Clauses which is a welcomed move but it has maintained the existence of narrow MFNs which BIBA believes are anti-competitive to the detriment of the consumer. These mean that a broker has to display the highest price of those shown on Price Comparison websites on their own website, rather than the lowest price.
Graeme concluded, ‘This is clearly to the detriment of the consumer. It is solely to the anti-competitive benefit of price comparison websites and not the consumer. We hope the FCA will look to act on this in the future.’