In letters to the chief executives of insurance firms[2] and brokers[3], we have today outlined work we are carrying out in the insurance market for multiple-occupancy residential buildings. We have also responded[4] to a letter[5] from the Department for Levelling Up, Housing and Communities (DLUHC) on this issue.
Although insurance premiums are just one aspect of the rising costs faced by residential leaseholders in the wake of the Grenfell tragedy, we want to ensure products provide fair value and premiums fairly and accurately reflect risk.
The letters outline the work which includes examining firms’ approaches to pricing for multi-occupancy buildings and whether elements unrelated to risk such as commissions are driving up costs. The letters also remind firms of their obligations under our rules, including to consider the costs borne by leaseholders when determining whether a product is fair value.
We are asking firms to consider what actions they can take to help leaseholders, whether individually or by identifying collective solutions as an industry.
This work will be done with the Competition and Markets Authority where appropriate.
10 May 2022 update
We have written to the Department for Levelling Up, Housing and Communities (DLUHC), providing an update[6] on our work over the past three months.