LMA – Consumer Duty guidance for managing agents published

On 18th October 2022 the Lloyd’s Market Association (LMA) published a general guidance document for the implementation of the FCA Consumer Duty. This document aims to support the work of managing agencies in the Lloyd’s market in implementing the FCA Consumer Duty; this guidance document is the first product of the LMA’s Consumer Duty Working Group (a sub-group of it’s main Conduct Committee).

The Consumer Duty sets standards of care that firms are required to give retail customers with an expectation of enhanced standards of consumer protection by requiring firms to ensure that their products and services are fit for purpose, offer fair value, and help consumers make effective choices. The Consumer Duty is a regulatory duty rather than imposing any new legal duty of care.

The Consumer Duty identifies the following four areas where the FCA wishes to see good outcomes for retail customers:

  • products and services,
  • price and value,
  • retail customer understanding,
  • customer support.

The Consumer Duty also applies new rules which cut across those four outcomes as follows:

  • act in good faith,
  • avoid causing foreseeable harm,
  • support customers to pursue their financial objectives.

The LMA stated that the Lloyd’s market has already implemented the IDD (which imposed rules requiring firms to act in the customer’s best interests) and more recently, the FCA’s General Insurance Pricing Practices and Fair Value assessments (enhancing product oversight and governance); because of the implementation of these FCA initiatives, the LMA feels the market is well prepared for the required changes imposed by the Consumer Duty.

More information on the Lloyd’s Market Association Bulletin can be found here.

Dates and details of the key milestones can be seen on the FCA’s webpage here.

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