Commission cut threat remains as FCA continues residential leaseholder insurance study
The Financial Conduct Authority has written to Michael Gove stating that limiting broker commissions is still under consideration as a method to reduce insurance costs for property leaseholders as it attempts to create a fairer market for consumers.
Gove, who is Secretary of State for Levelling Up, Housing and Communities Minister for Intergovernmental Relations, asked the watchdog to investigate the market earlier this year to shed light on why the costs for leaseholder insurance increase year-on-year and assess the causes of the marked restriction in coverage available for multiple-occupancy buildings.
According to an FCA letter to Gove, dated 10 May 2022, the regulator outlined the key drivers of harm in the market. These are:
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