Financial Conduct Authority chief executive Martin Wheatley will today promise the new regulator is a “very different animal” to the FSA.
In a speech at the Association of British Insurers’ biennial conference, Wheatley will admit he understands why the industry doubted the regulator would genuinely change.
He will say: “One of the questions I was most frequently asked 101 days ago was ‘is the FCA going to be genuinely different from the FSA?’. We understand why people reserved judgement – the FSA needed to change.
“100 days later I think we are taking steps in the right direction. The FCA is in many areas a very different animal from the FSA.
“We are not just asking ‘is this product compliant? Does it tick every legal box?’ But actually ’is the outcome good? Is the market competitive? And is fair treatment of consumers designed into products and culture?’”
Wheatley will say after 100 days in operation, his focus is on creating successful, competitive markets.
He will say: “A market that works well for consumers and for firms will be of benefit to everyone and to the UK economy. We want consumers to be in a position to drive healthy competitive markets so that they become the new normal.”
Wheatley will add: “We each have a vested interest in making markets work well for all participants.
“Regulators need to serve the market better by acting more swiftly. By intervening earlier and more intelligently to avoid crises down the line.
“That process of repair is now underway. Our first 100 days are a marker of what lies ahead.”
Wheatley will say the FCA’s first look at competition in the market will focus on general insurance products sold alongside bigger purchases such as holidays, cars or gadgets.
The FCA will conduct a market study looking at the nature of competition in these markets, in particular whether they represent good value for money and whether consumers understand what they are getting with their policy.
Wheatley will say: “Our new competition duty is the single most significant change in our objectives as a regulator. It means that we don’t just wait for problems before we try to promote competition in the markets we regulate.
“We have our first market study underway looking at general insurance add-ons. We have called for evidence and approached a number of firms in the market for information. We are testing whether poor outcomes in add-on sales could reflect particular consumer behavioural traits and firms’ responses to them.”