The Financial Conduct Authority (FCA) has set out its final rules for insurance firms to transfer and replace retained EU law provisions from the Insurance Distribution Directive.
The regulator confirmed it is replacing the Insurance Distribution Directive (IDD) delegated regulations with its own rules and guidance.
After its consultation on the implementation of the rules and guidance was received with almost unanimous support, policy statement 23/18 confirmed the regulator will not be making any changes to the existing provision with the new policy.
These changes to sourcebooks replace the provisions of the retained EU law (REUL) which is being repealed.
The FCA added the change will provide continuity of the regulatory regime which applies to insurance-related activities, and is intended to come into force on 5 April 2024 to align with the Treasury’s repeal timetable.
The UK fully implemented the Insurance Distribution Directive (IDD) in 2018. This was mostly done through changes to FCA rules, but some of the requirements were contained in EU delegated regulations.
Following Brexit, these are part of retained EU law. The Treasury’s Smarter Regulatory Framework Review included repealing these IDD delegated regulations.
In CP23/19, the FCA consulted on changes to various sourcebooks needed to maintain requirements which currently apply to firms, whether directly under the IDD delegated acts or where it applies them through rules and guidance, once the relevant part of retained EU law is repealed.