(Alliance News) - UK watchdog Financial Conduct Authority's decision to tighten regulation over the funeral plans market comes as no shock to Dignity PLC, a spokesperson at the funeral services provider told Alliance News on Monday.
"Dignity has worked closely with the FCA throughout its market investigation process, and has been working diligently to ensure the FCA readiness of our business," the spokesperson said.
The financial services regulator on Monday confirmed plans to raise standards in the funeral plans market.
"As we take over the regulation for this market, we will be rigorously assessing firm's fitness to operate. Firms must now plan for this new regulatory regime or prepare to leave the market in an orderly manner," said Sheldon Mills, executive director, Consumers & Competition at the FCA.
The new rules, which will likely affect London-listed Dignity, will introduce "high standards" in the funeral plans market and require firms to ensure that plans are "sold fairly, perform as expected and provide value for money".
The new rules include: the ban of cold calling and commission payments to intermediaries; ensuring that funeral instalment plan products will always deliver a funeral; and that "those selling funeral plans are subject to full checks on their fitness to operate to improve governance standards and oversight".
"The group welcomes the new standards and timelines announced today which will provide the much needed consumer protection that Dignity has long sought in the pre-need funeral market," the company spokesperson said.
Mills at the FCA said: "Funeral plans should provide customers with comfort and certainty that their affairs are in order.
"Our new rules for the sector will drive up standards and ensure that when consumers buy a plan, they receive a product that matches their needs and expectations. We are banning all commission payments to intermediaries to make sure products offer fair value, and, having seen the real harm cold calling can cause consumers, we’ll be banning it."
The new rules will come into effect in July next year.
Shares in Dignity were up 6.2% at 916.59 pence on Monday in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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