FCA Handbook - ICOBS 6A.6 Cancellation of automatic renewal

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ICOBS 6A.6 Cancellation of automatic renewal

Application

This section applies in relation to all general insurance contracts entered into with consumers which have an automatic renewal feature except for:

(1)
private health or medical insurance; and
(2)
pet insurance.

Purpose

The purpose of this section is to support Treating Customers Fairly outcome 6 – “Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint”, by making it easier for consumers who wish to prevent their policy from automatically renewing to cancel this feature of their policy.

Requirement for a range of cancellation methods

A firm must provide a consumer with easy and accessible methods for cancelling the automatic renewal feature in the consumer’s contract.

(1)
The methods provided by a firm in accordance with ICOBS 6A.6.3R must include at least all the methods by which a consumer is able to purchase a new policy with the firm.
(2)
A firm must consider the needs of its customers when determining what cancellation methods it provides.

An easy and accessible method for cancelling an automatic renewal feature is a method that does not place any unnecessary barriers on the consumer who uses it. Unnecessary barriers may include one or both of the following:

(1)
unreasonably longer call waiting times to cancel the automatic renewal feature than to purchase a new policy; and/or
(2)
unnecessary questions or steps before the consumer is able to confirm their instructions to cancel the automatic renewal feature.

Times a consumer may cancel

A firm must allow the consumer to exercise their right to cancel the automatic renewal feature:

(1)
at the time the consumer purchases the policy and at any time during the duration of the policy; and
(2)
free of charge.