FCA moves to further simplify insurance rules

The FCA has proposed to strip overlapping and outdated requirements from its insurance rulebook.

The proposals include simplifying the detailed rules that apply to non-UK insurance business, which will reduce duplication with regulation already in place wherever the consumer has taken out the insurance.

High level requirements will remain in place to maintain consumer protections. 

The FCA has also suggested removing certain disclosure requirements that overlap or add little value.

The regulator said that this will benefit consumers by allowing them to focus on what is most important and that firms will also have increased flexibility, including greater use of digital channels to communicate more simply and in the most appropriate way for customers. 

Graeme Reynolds, director of competition and interim director of insurance at the FCA, said: “Our insurance rules need to keep pace with changing technology and consumer behaviours.

“These proposals would make our regulation more flexible and proportionate for firms, supporting competitiveness without affecting strong consumer protections for UK consumers.”

Further proposals

The FCA has also launched a consultation on ways to make it easier for financial businesses involved in retail markets to comply with the Consumer Duty.

These proposals include removing products sold exclusively to non-UK customers from the Consumer Duty’s scope, clearer boundaries on when it does not apply and more clarity on firms’ responsibilities when working together. 

The deadline for the consultation is 4 September 2026. 

Commenting on the proposals, Christopher Croft,  chief executive at the London and International Insurance Brokers’ Association (Liiba), said: “Liiba welcomes the publication of this consultation paper and will review it in discussion with our members. 

”Our initial thought is that we welcome the establishment in the handbook of the previous position FCA had confirmed to us – that its conduct and product governance rules do not apply to overseas business.  This considerably reduces the regulatory burden on our members who are predominantly active in international markets.  It is a boost to London’s international competitiveness.

“The other proposals around disclosure and reporting, while primarily aimed at the retail markets that Liiba members do not participate in, also show a reassuring willingness on the part of FCA to examine the impact its rules have – especially on small broker businesses – and seek to be proportionate in its application.”