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Multi-occupancy Building Insurance

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Effective from 31st December 2023, the Financial Conduct Authority (FCA) has confirmed new measures to support leaseholders in the multi-occupancy buildings insurance market.

Impacting property managing agents, freeholder owners who are landlords of multi-occupancy buildings, leaseholder representative groups and individual leaseholders, the new rules in ICOBS 6A.7 require firms to produce disclosures to be provided to leaseholders. These changes also affect insurers and intermediaries.

We’re here to help you understand what these new measures are, and how they impact you. Below is a brief outline of what firms must now disclose to leaseholders:

A summary of the features of the policy, including main benefits, coverage and exclusions of the policy, duration and insured sum

The policy premium; where the policy covers a portfolio of buildings, firms must disclose the premium at building or dwelling level

The remuneration which any authorised intermediaries received for arranging the insurance, as well as remuneration they pay to other parties including unregulated PMAs and freeholders

The number of alternative quotes they have obtained (with further details of these to be provided on request) and a brief explanation of why they have proposed or recommended that the policy is in the interests of both the freeholder and leaseholders.

Information about potential conflicts of interests, such as ownership links between the intermediary and the insurer, and about the insurers with whom the intermediary may place the policy

It is worth noting: The FCA is clarifying the ‘leaseholder’ definition to set out more clearly that it covers residential leaseholders only. Firms will not need to provide disclosures intended for commercial leaseholders.

The FCA’s action follows its review of the multi-occupancy buildings insurance market and its aim to ensure better outcomes for Leaseholders and other policy stakeholders.

What we’re doing

As a trusted adviser and broker to thousands of clients throughout the UK, we want you to know that we’re ready for these new measures and are here to help support and guide you through these changes. We have extensive and strong relationships with insurers and have been working closely with them to understand how the new rules impact their products and any relevant documentation. Our expert team will highlight the disclosure requirements to you and the information you need to pass onto your leaseholders.

If you have any questions or would like further advice and guidance, simply complete our short contact form and one of our team will be in touch.

Adler Fairways has over 40 years’ experience in arranging specialist and bespoke property insurance, helping clients mitigate their risks and remain protected. We use this experience to source the right level of cover for freeholders, landlords, property managing agents, residents’ associations and property owners up and down the country, ensuring it is tailored to their unique needs and circumstances.

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