CP26/22: Simplifying the insurance rules

Read CP26/22 (PDF)[5]

These are part of our wider plans to streamline rules and reduce complexity for firms[6], and follow final rules[4] published in December 2025. 

Alongside this consultation, we are consulting on the application of the Consumer Duty to business with non-UK customers. We have taken a consistent approach to disapplying ICOBS and PROD 4 with disapplying the Duty.

What we are changing

We are consulting on:

• Narrowing the scope of our rules for non-UK business: Amending the territorial application scope of our Insurance Conduct of Business Sourcebook (ICOBS) and our Product Intervention and Governance Sourcebook chapter 4 (PROD 4). The detailed insurance conduct requirements would apply where there is a clear UK connection, based on the customer’s habitual residence and, where relevant, the location of the risk. This would reduce duplication and potential conflict with overseas regulation. High-level requirements (such as the Principles (PRIN) (other than the Duty) and the Senior Manager Arrangements, Systems and Controls sourcebook (SYSC) rules) will maintain appropriate consumer protections. 
• Removing unnecessary disclosure requirements: Removing certain duplicative or low-value disclosure requirements across ICOBS that don’t meaningfully help customers make choices. 
• Increasing flexibility in means of disclosure: Giving firms greater flexibility in how disclosures are provided to customers, including increased use of digital channels. Firms must still provide required information in a durable medium appropriate to customer needs and way the product is distributed. Firms must continue to provide information on paper at the customer’s request.
• Simplifying rules for advised sales of insurance products: Simplifying the rules that apply when insurance is sold with advice by removing references to ‘advice’ that do not involve a personal recommendation. This leaves a clearer distinction between sales involving a personal recommendation and those that do not.
• Amending rules for professional indemnity insurance (PII): Amending the currency denomination of minimum PII levels for insurance intermediaries from euros to Pounds Sterling at an appropriate conversion rate, without reviewing or changing the underlying minimum levels.

Who this applies to

• Regulated insurers and insurance intermediaries including those within the Lloyd’s market, Gibraltar-based firms and temporary permission (TP) firms.
• Insurance market trade associations.
• Commercial insurance buyers.

Who else will be interested in this consultation

• Industry groups and trade bodies.
• Consumer groups and organisations.

Next steps

Online response form[7] 

We are asking for comments on this Consultation Paper (CP) by 4 September 2026.

You can send them to us using this form[9].

Or in writing to:

Insurance - Policy & Risk team
Financial Conduct Authority
12 Endeavour Square
London E20 1JN

Email: [email protected]

We continue working with stakeholders to make sure our rules strike the right balance between appropriate protections for consumers and supporting innovation and growth.

Firms should read the consultation alongside the following documents carefully and respond where needed.

Background

The UK is a world leader and a global hub for commercial insurance, providing expertise in underwriting complex and specialty risks, and handling risks from all over the world. We want to support growth and innovation in the UK insurance market by streamlining our rules and requirements.

In our January 2025 letter (PDF)[10] to the Prime Minister we committed to reducing the conduct rules applicable to wholesale insurance.

We followed this with Feedback Statement FS25/2[11] in March 2025, which confirmed we would bring forward proposals removing unnecessary or duplicative regulation in the insurance sector.

In CP25/12 (PDF)[3] we consulted on proposals taking into account feedback received to Discussion Paper DP24/1[12] published in July 2024 and published finalised rules in PS25/21[13].