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Multi-occupancy building insurance regulation
Find out how the multi-occupancy building insurance regulation affects brokers and intermediaries.
On 31 December 2023, the FCA implemented their multi-occupancy building insurance requirements.
The rules are designed to increase transparency for leaseholders. This will make it easier for leaseholders to identify and challenge poor practices, which will encourage firms to deliver better outcomes.
Businesses are required to make:
With regards to remuneration, the FCA have made it clear that where firms are receiving percentage-based commissions, they will need to reduce the percentage rates, unless there has been a corresponding increase in benefits provided to customers.
Where you have any policies in scope of the MOBI regulations, you will need to ensure you are meeting the requirements. You will need to complete the following:
Provide the required disclosure information to the customer as soon as possible.
Do this after conclusion of the contract and upon any subsequent renewal.
Tell the customer to pass a copy of this information on promptly, and in full, to any residential leaseholder of the building.
In our role as product manufacturer, we have considered interests of policy stakeholders within our latest product governance reviews. Our Target Market Statements will not change as a result of these requirements.
We will be strengthening our reviews going forward, which may result in additional requests for information in the future. To ensure we meet the latest guidance for policy stakeholders, we will review our current commissions structures. We are also strengthening our approach for material increases in net premiums on in-scope products.
This may require further evidence from you to support percentage-based commissions to confirm commissions remain fair.
Where you have a delegated arrangement with us, we will be in contact separately to discuss the requirements.
A multi-occupancy building is a building that contains 2 or more units for occupancy. This can be residential, commercial, institutional, industrial uses, or a combination.
The following clarifies the type of leaseholder in scope of the disclosure requirements:
We already provide you with all the disclosure information we are responsible for producing as the insurer and product manufacturer across the products in scope.
Where we are the follow manufacturer, it is the broker or lead insurer's responsibility to provide this information.
The following table summarises where you can find the required information for our products.
| Information required | Where to find this information |
|---|---|
Summary of cover | |
Name of the insurance undertaking | Policy wording or policy summary |
Regulatory status | Policy wording or policy summary |
Type of insurance | Policy wording or policy summary |
Main risks insured | Policy wording or policy summary |
Summary of excluded risks | Policy wording or policy summary |
Total policy sum insured, together with:
| Policy schedule |
This only needs to be provided if the MOBI contract provides cover.
Where a leaseholder contacts you with a query, we expect a resolution within a reasonable timescale.
If you do not have all the information you need from us, please contact us.
If a leaseholder contacts us for direct support, we will refer to you before responding.
Notify us of any payments made to third parties on MOBI products in view of the MOBI expectations.
Where there are significant increases in premium, ensure that any commission and other remuneration remains in line with the levels of service and benefit you provide.
Any excess payable in the event of a claim
Policy wording or policy schedule |
The term duration of the policy | Policy schedule |
The policy start and end dates | Policy schedule |
Exclusions where claims cannot be made | Policy wording or policy schedule |
Significant features and benefits | Policy wording or policy summary |
Pricing information |
Total premium for the policy that includes a breakdown of the premium at:
| Policy schedule (see further guidance) |
The amount of insurance premium tax payable | Policy schedule |
Where applicable, the amount of any value added tax | Not applicable |