28 March 2024
The actions we are taking so that we, with you, can comply with the requirements of the Financial Conduct Authority (FCA) to ensure good outcomes for residential leaseholders.
Introduction
Following a review of the Multi-Occupancy Buildings Insurance market, the Financial Conduct Authority (FCA) found that prices had risen significantly since the Grenfell tragedy. Leaseholder insurance needs were not being met and third parties were receiving undue commission. As a result, the FCA brought in new rules which apply to insurers and brokers.
Multi-Occupancy Buildings Insurance Rules
The Multi-Occupancy Buildings Insurance (MOBI) rules place a duty on insurers and brokers to disclose certain information to residential leaseholders of multi-occupancy buildings insurance products. In summary, leaseholders must be treated as customers when designing products and policies should not be recommended based on commission or remuneration levels. In addition, leaseholders must receive fair value from their policies and be provided with important information including pricing and any commission paid.
Which policies are impacted?
Ecclesiastical products in scope for the new rules:
- Property Owners
- Property Investors
Individual policies on other products may be impacted by the rules if they include residential leasehold arrangements.
Disclosure requirements for leaseholders
The Insurance Conduct of Business Sourcebook (ICOBS) includes new rules under section 6A.7, requiring us to provide certain information to you as the broker, for you to share with your relevant clients. This includes information about the cover and about the pricing of the policy.
Much of the information about the cover is already contained in our Summary of Cover documents, which can be found in ourdocument libraryon our website. Information about the pricing of the policy at building level will be included in a Leaseholder’s Certificate of Insurance.
The table below shows where you can find the information.
Information about cover | Where to find it |
| Name of the insurance undertaking and its regulatory status | Summary of Cover |
| Type of Insurance | Summary of Cover |
| Main risks insured | Summary of Cover |
| Summary of excluded risks | Summary of Cover |
| Exclusions where claims cannot be made | Summary of Cover |
| Significant features and benefits | Summary of Cover |
| The sums insured. We will provide this for the whole building and, where we already hold this information, at flat or dwelling level | Leaseholder’s Certificate of Insurance |
| Excesses | Leaseholder’s Certificate of Insurance |
| Term or duration of the policy including the start and end dates of the contract | Leaseholder’s Certificate of Insurance |
Information about pricing | Where to find it |
| The amount of insurance premium tax | Leaseholder’s Certificate of Insurance |
| A breakdown of the premium. We will provide this for the whole building and, where we already hold this information, at flat or dwelling level. | Leaseholder’s Certificate of Insurance |
What this means for you
We will send you the Leaseholder’s Certificate for your new and renewing clients. We will ask you to verify certain information with your clients in case any assumptions we have made need to be changed.
Direct contact with leaseholders
Where leaseholders contact us directly for the information, we will pass them onto you in the first instance to verify their identity as a leaseholder. We will engage with you to ensure enquiries are followed through to completion. If leaseholders contact us again, we will confirm their identity as a leaseholder with you and will provide them with the Summary of Cover and the Leaseholder’s Certificate of Insurance.
Product governance arrangements
We have reviewed our product oversight and governance processes (including product design and review) to ensure the needs of leaseholders are met.
Fair Value Assessment Outcome Statements are also available on our website for affected products.
Private dwelling houses
The rules also apply to private dwelling houses with leasehold arrangements. Please ensure you notify us of any buildings in scope so that we can provide you with the appropriate disclosures for the leaseholder.
Please contact your Ecclesiastical Account Manager if there are any queries or specific requirements you wish to discuss.
