The FCA published the report on its thematic review of mobile phone insurance (MPI) yesterday. The second thematic review carried out by the regulator, it followed the example set by the recent review of motor legal expenses insurance (see our earlier blog post here), and condemned opt-out selling practices. However, the focus of the report was on product governance which sometimes led to products which did not meet customers’ needs, and inadequate complaints procedures.

Particular flaws identified by the FCA included failure to define the scope of product cover properly (eg what constituted a public place) which sometimes led to genuine claims being rejected, draconian exclusions (rejecting a claim made just outside the 48 hour notification window) and complaints/appeal procedures which did not meet the required standard (eg by mail only, rather than by any reasonable means). The regulator also identified that some firms took too long to pay claims, and some seemed to be operating a “two-stage” claims process (where appealed claims were more likely to succeed than those initially submitted).

The regulator said that the firms involved in the review were improving their practices, and that they may look at the sector in future. If firms are still unable to show that they are treating their customers fairly, the FCA will take regulatory, and possibly enforcement, action.