The FCA has confirmed changes to simplify its rules and lower costs for insurers, while maintaining appropriate levels of protection for smaller commercial customers.
The final rules aim to give more flexibility and responsibility to insurance firms, such as determining the frequency of their product reviews and how much continual professional development (CPD) staff should undertake.
The FCA will make further changes to its insurance rules and cut unnecessary requirements next year, including reviewing the international application of its rules and the Consumer Duty.
Separately, the FCA has also published proposals that will benefit insurers and other firms, including a raft of technical changes to streamline its rules and reduce complexity following the introduction of the Consumer Duty. This includes proposals to:
- remove 3 further insurance data returns
- review eligibility and disclosure rules for packaged bank accounts (PBA)
- streamline and simplify rules on collective investment and update rules on client assets
- remove Handbook references no longer needed now the Consumer Duty is in force.
The FCA has also set out wider plans to better support smaller financial firms by creating sector guides to help them apply outcomes-based regulation, starting with consumer credit firms next year. The pilot will inform the FCA’s longer-term approach to supporting smaller firms.
Graeme Reynolds, director of competition and interim director of insurance at the FCA, said:
'We’re simplifying and removing rules for insurers and brokers, reducing regulatory costs and helping them focus on delivering better outcomes.
'Our focus on smarter regulation is not once and done, and by using the Consumer Duty we’ll continue to look at rules we may no longer need. We want firms to keep engaging with us on further simplifications for the insurance sector, so we can support growth and innovation.'
Notes to editors
- Read PS25/21: Simplifying insurance rules[3].
- Read CP25/37[4] on Technical Handbook updates (Consumer Duty Requirements Review).
- On 23 September Which? submitted a super complaint to the FCA about poor consumer outcomes in the home and travel insurance markets. The FCA has 90 days to respond to Which? setting out how it will deal with the issues raised and any action it will take.
- The FCA enables a fair and thriving financial services market for the good of consumers and the economy. Find out more about the FCA[5].