PCA probes insurance issue after Star admission

The issue relates to regulation 46 of the pubs code, which ensures transparency for tied tenants of pub companies in relation to premises insurance and gives them the right to find a cheaper policy.

Star Pubs & Bars’ code compliance officer – whose role it is to verify compliance with the pubs code – reported to the PCA in August 2021 that information provided to tenants about premises insurance had not complied with regulation 46. Star said this had caused no detriment to tenants. The PCA confirmed this issue runs from the start of the implementation of the pubs code in 2016.

Full transparency

Under regulation 46, a pub company operating under the rules of the pubs code must provide the tenant with information about the premises insurance where it intends to charge the tenant in respect of the premium. This ensures full transparency and allows the tenant to look for a cheaper policy. If they find one that is suitable and comparable, the pub company must buy that policy or agree the tenant will not have to pay the difference.

Specifically, the information supplied under regulation 46(2) must include whether the amount the pub company charges the tenant to insure the premises is more than it pays in respect of the insurance premium, and how much more that is. The pub company must also say whether it will receive any commission or rebate in connection with the policy.

Guidance updated

Star took the view that it was not possible to comply with regulation 46(2) due to its self-insurance arrangements through a company owned by the Heineken group (which also owns Star). Star told the PCA that at the point it had to write to tenants under regulation 46, it was unable to say whether there was information it needed to provide under 46(2), particularly as it did not hold information on the insurance premium for a particular premises.

Star also admitted correspondence sent to tenants in December 2020 about the insurance recharge had not included necessary detail about the identity and operation of its policy and the option to price-match. Further information was sent to tenants in March 2021 to address this and Star has since updated its Guide to Insurance Responsibilities ​to make the position clearer. Star has also assured the PCA that such correspondence will be signed off by its code compliance officer and legal team in future.