Understanding Regulation

This web page summarises the main developments in regulation and deregulation from 2021 to date.

Loyalty Penalties - Insurance

Loyalty penalties are very annoying and expensive for those consumers who are too lazy or, for all sorts of others reasons, are unwilling or unable to 'shop around for better deals in regulated sectors. But they do encourage competition between providers.  No-one, after all, suggests that loss leaders and 'buy one, get one free' (BOGOF) deals should be banned in non-regulated sectors.

Intensive campaigns had already led to Ofgem (somewhat strong-armed by the government) price-capping Singe Variable Tariffs (the default tariffs for energy consumers.  Then, with effect from early 2022, the Financial Conduct Authority banned loyalty penalties on consumers renewing their home or motor insurance policies.


Martin Stanley

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