Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 12
12
Paragraph: 31
While insurance premiums for leaseholders have gone up, buildings have become safer as a result...
Recommendation
While insurance premiums for leaseholders have gone up, buildings have become safer as a result of remediation works that have been carried out. The risk to insurers has reduced as a result. Insurers should be required to contribute to funds for remediation as they covered the actions of developers who failed to comply with building safety and have since received increased premiums despite remediation works being undertaken. The Government should ask the Financial Conduct Authority to publish an analysis to illustrate on an annual basis since the Grenfell fire how the level of pay-outs by insurers for fire safety claims in medium and high-rise buildings compares with the increase in premiums for buildings insurance for medium and high-rise buildings.
Paragraph Reference:
31
Government Response
Acknowledged
HM Government
Acknowledged
On 28 January, the Secretary of State called on the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) to review buildings insurance premiums for people living in medium and high-rise blocks of flats. Although the initial request for a review came from the Department, the scope of the review will be defined by the FCA as the independent regulator of the financial services sector. The FCA are focusing their attention on areas where they observe unfair or unexplained prices for leaseholders. The FCA has met with Chief Executives of key insurers and insurance brokers to explain their expectations for engagement in the review and affirm their regulatory expectations. The FCA is currently collecting data on market conditions to inform their review, and we understand that the FCA and CMA will provide recommendations in summer 2022.