BIBA welcomes FCA's rule changes on insurance for residential multi-occupancy buildings

BIBA has welcomed the rule changes announced by the FCA today in its Policy Statement on residential multi-occupancy buildings.

In a statement issued this afternoon, the association welcomed, in particular, the introduction of the new policy stakeholder status for leaseholders and the increased transparency requirements around insurance arrangements and remuneration, adding that it had commissioned extensive new work to help members better demonstrate fair value for the activities and services they provide in this sector.

“This entails a new Fair Value Assessment Framework which members can adapt for their own business models to articulate, measure and evidence value for both the commission they retain and any commission they might share with freeholders and property managing agents for insurance related activities they undertake,” the association stated. “It also coincides with a new member pledge that BIBA members are being asked to sign up to which makes important commitments around remuneration practices for residential buildings over 11m in height that have material fire safety issues.”

BIBA is also at an advanced stage in its work with the ABI and McGill and Partners to launch a new Fire Safety Reinsurance Facility (slated for later this year), which is designed to allow a group of insurers to deploy more risk capacity for medium and high-rise residential buildings that have material fire safety issues.

The aim of this scheme is to reduce reliance on expensive excess of loss reinsurance placements which brokers need to purchase to ensure a building is fully insured, and hence reduce the overall premium.

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