The Financial Conduct Authority (FCA) is consulting on ending its requirement for insurance firms to review the value of their product at least every 12 months.
Under its proposal, firms would instead use the risks and characteristics of each product to decide how often they review them.
It is also proposing to removing the specified minimum hours of training and development required for insurance and funeral plan employees.
The plan features among a number of measures in an FCA consultation following on from its commitment to withdraw over 100 pages of outdated guidance in a bid to streamline its rules, reduce burdens on businesses, and improve outcomes for consumers after the introduction of the Consumer Duty.
Other proposals include:
- 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. The regulator notes that 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.
The FCA is asking for comments on its proposals by 2 July 2025. The regulator is also inviting views on whether it should limit the scope of some rules to UK customers.
Drive to become smarter regulator
Matt Brewis, director of insurance at the FCA, (pictured) said: “We are stripping back our insurance rulebook by removing ineffective, outdated or duplicated regulation, as part of our drive to become a smarter regulator and support growth.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.”