FCA PUBLISHES FINAL RULES BANNING OPT-OUT SELLING FOR ADD-ON PRODUCTS

Arc Legal has generally welcomed the regulator’s moves to improve consumer choices and outcomes around the add-on sector. The banning of opt-out selling and improving information provision for add-on buyers are important in ensuring consumers are able to make informed decisions about the products they purchase.

The vast majority of clients have already moved to offering Legal Expenses Insurance (LEI) on an opt-in basis or embed it within existing products. We continue to work with our clients, offering product training and marketing materials that clearly provide key product benefits, to ensure they provide the appropriate levels of support and information to their customers.

Ensuring that the value and benefits of LEI products are made clear to consumers at the point of sale should, we believe, see traditional opt-in sale conversion levels improve. Another positive outcome is that for those consumers who have already purchased their LEI on an opt out basis, they will not be required to opt back in. There will be continuity of cover without the potential for customers assuming their policy had automatically renewed, only to find that at the point of a claim this was not the case and they were not covered.

Providing consumers with clear information on the value of LEI products is an important step. But we will continue to call for value measures specific to LEI. These would truly reflect the specific benefits that consumers derive from the legal services and funding arrangements that exist in this specialist add-on product, rather than the broad brush approach currently proposed by the regulator that is not an appropriate measure of value for this complex product.

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