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 the Consumer Duty, including the requirement to avoid causing foreseeable harm (PRIN 2A.2.8R) and the expectation that consumers do not face unreasonable barriers when they want to switch (PRIN 2A.2.10G(5)(iii)), 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.