The Financial Conduct Authority’s (FCA) pure protection market study will potentially last a year longer than expected by stretching into the second half of 2027, the regulator has revealed.
It also confirmed the study’s interim report which was due to be published by the end of 2025 has been delayed until 2026, alongside the full consumer research.
The market study into the distribution of pure protection products, which is expected to have a “high” impact on firms, was previously expected to reach into the second half of 2026.
However, as an update to its regulatory grid, the FCA is now scheduling it to reach into the second half of 2027.
Key milestones and formal engagement are planned for the first three months of 2026 and the first half 2027, with further formal engagement in the three other quarters of 2026 and post-July 2027.
The FCA noted that in particular, the study is looking at the design of some commission arrangements, whether some pure protection products provide fair value to consumers, and the strength of competition given the recent exit of several providers.
“The FCA recently published a summary of its quantitative consumer research findings. The FCA intends to publish its interim report at the beginning of 2026, alongside the full consumer research report which will combine both quantitative and qualitative findings,” it added.
Grilling 30 insurers and advisers
As part of the study, the FCA issued detailed information requests to more than 30 insurers and intermediaries.
It began sending the requests in June asking for data from the years 2021 to 2024 and including a deep focus on business models and the fair value of distributor commission.
In August 2024 the regulator revealed it would be conducting a review into the operation of the pure protection market including commission structures including loaded commission and the shrinking insurer market.
In March this year the FCA expanded the areas under consideration for its pure protection market study to include restricted panels of insurers used by distributors’ cover for customers who have pre-existing medical conditions and barriers to innovation and investment.
It will also consider the activities of reinsurers, portals, product comparison platforms, and lead generators as part of its pure protection review.
These had not been within the scope of the study when the FCA published its initial terms of reference in August 2024, but have been added after consultation with the market.
However, private medical insurance (PMI), business and key person insurance, accident, sickness and unemployment insurance (ASU), funeral plans and insurance products with a savings or investment element will be outside the scope.
