The Financial Conduct Authority has finalised a series of reforms designed to simplify insurance regulation, reduce costs and give firms greater discretion over how they meet existing requirements.
The FCA said the new measures will maintain appropriate protections for smaller commercial customers while offering insurers and brokers more flexibility in areas such as the frequency of product reviews and levels of continual professional development for staff.
The regulator also confirmed it will bring forward further changes next year, including a review of the international application of its insurance rules and the implications of the Consumer Duty.
The work forms part of its drive towards more outcomes-based supervision and the removal of requirements considered no longer necessary.
In a separate consultation, the FCA outlined a number of technical amendments intended to streamline its rulebook following the introduction of the Consumer Duty.
The proposals include the removal of three additional insurance data returns, a review of eligibility and disclosure rules for packaged bank accounts, and a simplification of collective investment client asset rules.
The FCA also plans to delete Handbook references that have become redundant since the Consumer Duty came into force.
Alongside these changes, the regulator has set out a broader plan to improve the guidance available to smaller financial firms. It will begin creating sector-specific guides intended to help firms apply outcomes-based regulation more consistently.
The first guide, targeting consumer credit firms, will launch next year and will inform the FCA’s longer-term approach to supporting smaller businesses across the market.
Graeme Reynolds, director of competition and interim director of insurance at the FCA, said: “We’re simplifying and removing rules for insurers and brokers, reducing regulatory costs and helping them focus on delivering better outcomes.
“Our focus on smarter regulation is not once and done, and by using the Consumer Duty we’ll continue to look at rules we may no longer need.
“We want firms to keep engaging with us on further simplifications for the insurance sector, so we can support growth and innovation.”
