Important Note: Change to Industry Practice - FCA Multi-occupancy building insurance rules PS23/14

On 29th September 2023 the FCA published its multi-occupancy building insurance Policy Statement (PS23/14) which introduces new rules effective from the 31st December 2023 with the aim of ensuring good customer outcomes for Residential Leaseholders and other policy stakeholders.

The new rules see additional requirements in relation to the disclosure of information through the distribution chain which must ultimately be passed onto residential leaseholders who contribute towards the buildings insurance premium, as well as ensuring the interests of residential leaseholders are taken into consideration during product fair value assessments.

Thames Underwriting have completed a review of the products in scope of the rules and changes made to ensure compliance with new regulation, for contracts concluded from the 31st December 2023 onwards, as follows.

Renewal and Quotation Processes

For all properties where there is a residential element we will require disclosure of any residential leaseholds. Any residential leasehold occupancy of each property will then be held on our file/system for document production and reporting purposes. Renewal notices will make specific reference to the new rules and the requirement to disclose this information and our renewal and quotation processes, whether proposal form, system driven or statement of fact based are being amended to capture this.

Document Changes

Alongside the introduction of new question(s) in our Statement of Facts and Proposal Forms to ensure we gather the information required we will also introduce a new text within our Renewal Invites and Quotation letters to remind our agents of their responsibilities in respect of the new rules. We will also be changing our Policy Documentation to enable it to provide a split of Buildings premiums by premises where required to do so.

Information Disclosure

As required we will provide the following to our brokers/distributors post contract conclusion:

Buildings Premium and Sum Insured Breakdown - For any properties that have a residential leasehold element we will provide a breakdown of the premium, including IPT at building level as part of our standard new business and renewal documentation.

Summary of the Cover - The current summaries of cover for the in-scope products, which were reviewed as part of our Consumer Duty compliance work, read in conjunction with the policy schedule (which includes the premium and sum insured breakdown requirement above) will meet the “Summary of the Cover” disclosure requirement.

These documents should be shared by the intermediary (in direct contact with the customer), along with the other materials required to be disclosed by the intermediary, with a requirement for the relevant materials to be passed on to the residential leaseholder(s).

Fair Value Assessments

Our product governance processes, fair value assessments and consumer duty reporting are already sufficiently robust enough to quickly identify any potential fair value issues through the distribution chain including to those who are the ultimate beneficiaries (such as residential leaseholders or other policy stakeholders).

Contact from Leaseholders

Where we are contacted directly by a residential leaseholder we will in the first instance direct them to the intermediary who has direct contact with the customer. In the event that the leaseholder is unable to procure information from the broker, and subject to confirmation of identity, we will provide the premium and sum insured breakdown and summary of cover directly.

Should you have any questions please contact your representative.

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