The FCA has launched a dedicated page on its website aimed at funeral plan providers and intermediaries who sell funeral plans.
The page explains what FCA regulation will mean for firms in the funeral plan sector and how they can prepare for its introduction in July 2022. It also sets out the currently envisaged timelines running up to that date.
The FCA aims to make sure all funeral plan products meet consumer needs, and that providers take proper care of customers’ money and ensure it is used for delivering funeral services.
The new regulation takes in two categories of firms: funeral plan contract providers (and firms who carry out these contracts) and intermediaries (including funeral plan directors and will writers) who advise customers on funeral plan contracts or arrange these on their customers’ behalf.
In the case of the first category, the FCA notes, the regulations affect not just new funeral plan contracts, but also those previously agreed.
In the case of intermediaries, regulated activities in relation to funeral plan sales include:
- Arranging (bringing about)
- Dealing as an agent
- Making arrangements.
The regulator has warned that anyone who continues providing regulated services without being an authorised or exempt person (e.g. an Appointed Representative) will be committing a criminal offence.
The regulator has also confirmed that it will be carrying out a consultation on the fees applicable.
The regulator has provided the following guidance for firms as they prepare themselves for regulation of the funeral plan sector.
- Now – Start thinking about whether your firm will need to become FCA regulated and, if so, what it can do to prepare
- Q1 2021– Read and respond to the FCA’s Consultation Paper, which sets out the proposed rules, how to apply for authorisation, and the FCA’s expectations
- Q3 2021– Submit your application for authorisation as soon as possible to ensure there is sufficient time for it to be assessed
- 29 July 2022 – FCA regulation comes into force – by this date you must have become authorised or divested yourself of your books of business (existing plans) by sale or by winding up plans and returning funds to plan holders.
The FCA has confirmed that firms must either become directly authorised or become an Appointed Representative of an authorised firm (the Principal). The Principal firm will be responsible for the compliant conduct of each AR they appoint to sell, market or promote pre-paid funeral plans on its behalf.
If you would like to know more about this, or any other compliance-related issue, please contact a member of our expert team on 01925 765777, or email us at firstname.lastname@example.org