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…CONTINUE TO FOCUS ON CONSUMER IMPACT OF NEW PRODUCTS AND BUSINESS MODELS
Arc Legal Assistance (Arc Legal) has welcomed the publication of the Financial Conduct Authority (FCA) Thematic Review of motor legal expenses insurance (MLEI) but believes that the emergence of new products and business models needs ongoing Regulator scrutiny to ensure consumers’ needs are met.
Richard Finan, Director of Arc Legal, said: “We fully support the FCA’s position and have championed for a number of years the benefits of a proper MLEI policy, and that these benefits need to be made clearer to end consumers.
“However, the Thematic Review was conducted prior to the changes brought about by LASPO and fixed recoverable costs, and therefore doesn’t consider the impact of the new MLEI products and models being introduced to the market. This growth demonstrates the ongoing need for clearer information to be provided to customers over what their policy does and doesn’t cover. As a result, there is due reason for the FCA to accelerate the follow up review.”
Speaking about the challenges the sector is likely to face as it moves away from opt-out sales methods, Finan commented: “Despite everyone’s efforts to ensure customers are fully informed of the benefits of MLEI at the point of sale, conversion levels will reduce. This does have the potential to result in customers becoming involved in motor related litigation without adequate insurance for legal costs.
“In the post LASPO world this is likely to result in these customers, without BTE cover, having to ‘top up’ their solicitors’ costs out of their damages.”