The FCA has launched new Regulatory Priorities reports, starting with the insurance sector. This marks a new approach that will help to transform the FCAs supervision and streamline regulation. The FCA recommends that boards should read these reports.
The FCA’s annual Regulatory Priorities reports will provide specific key priorities for each sector. These reports are a clearer, more consistent way of communicating the FCAs sector-specific priorities. They will help firms understand what the FCA expect and where to focus.
These reports provide:
- Specific key priorities for each sector.
- Further relevant work that the FCA be undertaking in the next year.
For the insurance sector, the key areas of focus for firms are:
Improving consumer understanding, claims handling and service quality (this is the main priority affecting most firms)
- Comply with the Consumer Duty where it applies.
- Be clear: communicate clearly with consumers, so they understand what their insurance covers.
- Respond promptly, fairly and transparently to claims and queries, and deliver good outcomes when customers claim
- Test outcomes: monitor that their products and services deliver what has been promised to consumers
Increasing access to insurance (highlighting delivering good outcomes to vulnerable customers)
Supporting growth and innovation (supporting firms’ use of AI in insurance, but firms must monitor outcomes for consumers closely. The FCA will be reviewing cyber cover.)
Simplifying regulation
Reliance on the Consumer Duty to simplify rules:
- Consult on disapplying the Consumer Duty to non-UK business and review the international scope of ICOBS and PROD 4.
- Consult on further simplification of insurance rules and reporting, including GAP insurance rules.
- Review the value measures rules.
- Work with the Treasury and the PRA to review the Senior Managers and Certification Regime to halve its regulatory burden.
The report sets out, at pages 14 to 16, the FCA’s timeline of work for 2026 in relation to the above priorities.