Biba 2025: Some firms will find FCA’s refocused approach ‘challenging’ to navigate

As the FCA refocuses its approach onto bigger risks and consults on how to decrease regulatory requirements across the insurance, some firms may find the new flexibility challenging to navigate in compliance terms. 

That was according to panellists who spoke last week (15 May) at 2025’s Biba conference on a panel entitled A new era for regulation. 

The previous day, the FCA launched a consultation on how it could strip back “outdated or duplicated requirements from its insurance rulebook” while also lowering compulsory reporting on fair value, with firms given back the flexibility to decide when they should review each product.

During the panel, FCA head of market intervention for insurance Lisa Sturley said that the newly launched consultation, entitled CP25/12: Simplifying the insurance rules, was an ”indicator of the direction of travel and what [the FCA] want to see more of”.

She added: ”We are looking to firms that know their customers and their business and, on things like fair value assessments, saying that you should conduct these at the frequency commensurate with the risks that you see in these products.

”You understand the products and the target market, so it’s really important that you determine that. That will also allow you to free up resources to focus on the biggest risks that you see in your business and in your products, which plays very much into rebalancing risk.” 

Double-edged sword

Despite the FCA’s intention to strip back compliance requirements for insurance firms, Sturley was keen to emphasise that the regulator was not becoming “a less intensive” organisation,  but was simply “refocusing and rebalancing around bigger risks”. 

Michael Sicsic, managing partner at regulatory consultancy Sicsic Advisory, also joined the panel at Biba, adding: ”When the FCA talks about rebalancing risk, it means rebalancing between itself and the market.

”Depending on how the market take that, the expectation will be that large firms with capabilities will need to take on more around deciding what that looks like for themselves – there’s a lot of opportunity there, but I suspect that some firms will find it challenging to say what that will look like.”

For example, Sicsic said it may be difficult for firms to work out at what intervals they should conduct fair value assessments for their products.

He finished: ”That flexibility is beneficial, but there are challenges that come with it.”