Insurance and price regulation in the digital era

Price is where contract law places the greatest value on party autonomy, with a corresponding paucity of statutory control. Determining the point at which exchange occurs is routinely treated as an issue for contracting parties and markets to settle, with the role of the state limited in most cases to ensuring competitive markets.[1] But new forms of technology have reopened the relationship between pricing and regulation. Moreover, there is time lag between the application of these new technologies and the development of regulatory norms. This means that rules not designed for price regulation will need to be adapted or repurposed if regulators are to act. This chapter considers an issue under investigation by the Financial Conduct Authority (FCA) as an archetype: the regulation of pricing of consumer insurance products. At the heart of this is a question about the normative limits of contract: when should regulators step in when consumers overpay for goods or services?