June 25, 2024

FCA gives green light for resumption of GAP insurance sales

The Financial Conduct Authority (FCA) has granted authorization to several firms to resume selling Guaranteed Asset Protection (GAP) insurance after taking regulatory action to ensure fair value for customers.

Firms were required to demonstrate compliance with FCA rules and the provision of fair value to customers in order to recommence sales. This regulatory intervention has led to significantly reduced commission levels for GAP insurance sellers, ultimately benefiting customers by improving the overall value.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, stated: “We intervened when our data indicated that customers were not receiving a fair deal. I am pleased that, following productive discussions with the industry, a substantial portion of the market is now able to restart sales. GAP insurance can offer a valuable service to customers, and we are continuing to collaborate with the remaining market players to address our concerns.”

In February, the FCA announced that multiple insurance firms had agreed to temporarily halt GAP insurance sales in response to the regulator’s request. Subsequent engagement in March with the remaining firms in the market ensued.

As per the FCA’s 2022 value measures data, there were over 2.4 million active GAP policies. However, only 6% of the premiums paid by customers were disbursed in claims, with some firms allocating up to 70% of the insurance premium value in commissions to parties involved in selling GAP insurance.

The FCA has now approved the following firms to resume selling GAP insurance:

  • Fortegra Europe Insurance Company Ltd
  • Motors Insurance Company Ltd
  • Amtrust Europe Ltd
  • Financial & Legal Insurance Company Limited

FCA directs top insurers to halt GAP insurance sales for thorough review

Fortegra acquires majority interest in Premia Solutions


What is GAP insurance?

GAP insurance is a type of insurance that covers the difference between the amount owed on a vehicle and its actual cash value in the event of a total loss.

Why did the FCA intervene in GAP insurance sales?

The FCA intervened to ensure that customers were receiving fair value and that commission levels for selling GAP insurance were reasonable.


The FCA’s regulatory actions have resulted in improved value for customers in the GAP insurance market. By authorizing firms to resume sales only after demonstrating compliance with fair value standards, the FCA is working towards a more transparent and customer-centric insurance industry.

Leave a Reply

Your email address will not be published. Required fields are marked *