Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2020

Lord Empey Excerpts

Wednesday 6th January 2021 Grand Committee

[Lord Empey (UUP) [V]]

My Lords, I warmly welcome this order. It is perfectly fair to say that, in recent times, consumers have been bombarded by advertisements for these plans on television and radio and through other channels. As my noble friend said, people can be in a very vulnerable position in their lives when they are subjected to this pressure.

I would like to ask several things, in case I did not pick up some of the Minister’s comments. She made the point that some of the current operators may not be able to manage the new regulatory environment. What is the position for their policyholders, as it will be another 18 months before things are fully in place? What triggered the decision to push for this particular order? Was it the evidence of wrongdoing? Did the Government just decide to do so or did they receive a recommendation from the FCA in this regard?

While the Minister said that there were in the region of 1.5 million policyholders, can she give the Committee some sense of the amounts of money involved in this sector? It has grown exponentially in recent years. Also, what will the position be during the 18-month implementation period when people are still selling these policies, including perhaps a number of companies that will not be able to meet the requirements in the long term?

Clearly, markets change and evolve over time. We know this, but I am interested to know who is actually looking at it. When markets open up, perfectly good companies put forward policies. That is a great thing but, as the Minister has admitted, there are a certain number of people who are prepared to exploit. What is the position for companies that may not be in the United Kingdom but sell policies to it? In which regulatory environment will they operate, and what sanctions and security can be provided to consumers if they are not registered in the United Kingdom?

However, in broad terms, I welcome this order. It is overdue, as the Minister said. I hope that it will provide reassurance to a lot of people who perhaps currently find themselves holding policies that could still be vulnerable. It would be helpful if we could alleviate any further worry among those policyholders, particularly at a critical time in their lives.