This could mean firms are no longer required to review the value of their product at least every 12 months, and instead use the risks and characteristics of each product to decide how to review them.
This is part of the regulator’s aim to remove outdated or repetitive requirements from its insurance rule book. The FCA said this would lower costs and widen access for businesses and consumers who use insurance.
It wants to introduce a definition to identify large commercial insurance customers who should not be included in its conduct rules. The FCA said this would reduce the burden on firms insuring larger businesses that can manage risks independently, while protecting smaller commercial customers.
It has proposed allowing firms to appoint a lead insurer to comply with rules in instances where more than one party has designed the insurance product.
It also wants to broaden the scope of bespoke contract exclusions so they are easier for insurers and brokers to use. Further, it has proposed getting rid of duplicative annual reporting and an employer’s liability notification requirements.
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Finally, the FCA has suggested removing the specified minimum hours of training and development required for insurance and funeral plan employees.
Matt Brewis, director of insurance at the FCA, said: “We are stripping back our insurance rulebook by removing ineffective, outdated or duplicated regulation, as part of our drive to become a smarter regulator and support growth.
“We have listened to industry and we are taking action – in doing so, we will reduce regulatory costs and increase the competitiveness of the already world-leading UK insurance sector, while maintaining vital protections for smaller customers.”
The regulator is also inviting views on whether it should limit the scope of some rules to UK customers.
The consultation comes following its commitment to withdraw over 100 pages of outdated guidance in a bid to streamline its rules, reduce burdens on businesses, and improve outcomes for consumers after the introduction of the Consumer Duty.
The FCA is asking for comments on these proposals by 2 July 2025.
