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The UK’s world leading insurance market could benefit from simpler, more straightforward rules, under proposals published by the FCA today.
The regulator plans to strip outdated or duplicated requirements from its insurance rulebook, having asked what improvements it could make. The changes could support lower costs and wider access for the businesses and consumers who rely on insurance to manage risk, while maintaining appropriate levels of protection.The regulator is proposing to create a new definition to identify large commercial insurance customers who should not be captured by its conduct rules. This would ease the burden on firms insuring larger businesses that can manage risks independently, while protecting smaller commercial customers.The regulator is also proposing further measures that could benefit the insurance market more widely, including:No longer requiring firms to review the value of their product at least every 12 months. Instead, firms would use the risks and characteristics of each product to decide how often they review them.Giving firms flexibility to appoint one lead insurer to comply with its rules in instances where more than one party is involved in designing the insurance product.Broadening the scope of bespoke contract exclusions and making them easier for all insurers and brokers to use. Bespoke contracts are built to suit one customer upon that customer’s request, which means they automatically have the protections product governance rules provide.Getting rid of duplicative annual reporting and employer’s liability notification requirements.Removing the specified minimum hours of training and development required for insurance and funeral plan employees.Matt Brewis, director of insurance at the FCA, said:'We are stripping back our insurance rulebook by removing ineffective, outdated or duplicated regulation, as part of our drive to become a smarter regulator and support growth.'We have listened to industry and we are taking action - in doing so we will reduce regulatory costs and increase the competitiveness of the already world-leading UK insurance sector, while maintaining vital protections for smaller customers.'The regulator is also inviting views on whether it should limit the scope of some rules to UK customers.The consultation comes following its commitment to withdraw over 100 pages of outdated guidance in a bid to streamline its rules, reduce burdens on businesses, and improve outcomes for consumers after the introduction of the Consumer Duty.The FCA is asking for comments on these proposals by 2 July 2025.Notes to editorsRead our Consultation Paper (CP25/12).FCA strategy with priorities to ‘Support growth’ and become a ‘Smarter regulator’.Discussion Paper on Commercial and Bespoke insurance.Feedback Statement on Consumer Duty rule review next steps.
https://www.fca.org.uk/news/press-re...rance-rulebook