The Regulatory Horizon - 2018 and Beyond

As the year-end approaches, we have dusted off the crystal ball, stirred the tea leaves and rubbed the lucky rabbit’s foot to try and see what is in store for insurance brokers in 2018.


Insurance Distribution Directive – Feb 2018

The full rules and requirements will be known in the new year, which leaves little time to deal with anything significant; so all insurance brokers should already be working through the first policy to implement changes where needed. There have been calls for postponement from EU Parliament, but only the European Commission has the authority to change the implementation date.

The Insurance Distribution Directive Update - Last updated on 21/12/17

On 20 December the European Commission announced that there is a proposal to delay the implementation of the Directive until 1 October 2018.

This has to be agreed by both the European Council and the European Parliament.

The announcement can be viewed at

Whilst this is not definitive, there is every likelihood that the directive proposal will be supported by both of the above bodies. 

Firms should still be working towards implementation of all the required changes, but this additional period would give all parties more time to ensure that they are fully prepared.

GDPR - May 2018

This is well documented, although unfortunately, there appears to be a lot of conflicting detail out there and we are already seeing amendments from EU Commission, post-May 18. Given the scale and complexity, it is going to present a real challenge for many firms, but help is out there. The key is to take action now on core areas; the final pieces of the jigsaw are falling into place so firms can adopt new processes as necessary. Doing nothing is not an option.

SMCR Q4 2018 – Q1 2019

The Senior Managers and Certification Regime will be extended to all retail forms. We have seen the first consultation, and we expect the policy statement to be issued around Easter 2018, by which time we may have some idea of what the implementation timescale will be.

However, a 2nd CP/PS is needed for operational implementation. The first consultation is very heavy in detail, and we are sure some elements will be challenged robustly, so there is little we can do at this time other than being aware and understand the potential implications.

FSCS Funding

New rules are to be set out in 2018/19 to modify the funding system. At this stage, it is not clear if pure GI firms will be significantly affected, as there seem to be many proposals surrounding the IFA and investment sector.


We are all aware of the two historical thematic reviews carried out on consumer and SME claims. The FCA did promise a third thematic review on larger commercial and liability claims. Do not think this has been forgotten about. The FCA is still keen to look at this aspect, so watch out for this one. It may not seem a priority, but the FCA will have expected all firms to take note of the previous findings.

Renewal Transparency

The FCA is unhappy at the implementation and has given further guidance setting out how it expects firms to deal with this. It is possible that the FCA will go into the market to see what notice has been taken, so it is important to ensure that this has been embedded in your systems.

Appointed Representatives

We should expect an additional follow up thematic review after the FCA alert, issued on Nov 17. The FCA has previously expressed its concern about AR management, so this alert reflected that these concerns have not abated.

There is also going to be work on how SMCR will be applied to ARs as this was specifically excluded in the current SMCR consultation.

Client Money

There have been some suggestions for a further review and a re-issue in some form of CP12/20, which you may recall had some significant things to say about the management of Non-Statutory Trust client accounts.

Overseas / Unrated Insurers

The FCA is looking further into how brokers explain the risks of using such firms to clients, and why firms are using these entities. The FCA will want to look at what due diligence is undertaken and how this is refreshed, particularly where wholesalers are used.


There is a possible FCA follow up to the last thematic review to test what changes have been made.


Supervision still causes the FCA some concerns, particularly around how supervisors are assessed as competent. We can expect thorough checks of CPD to make sure that this is embedded throughout the firm’s structure.


GABRIEL is still under scrutiny, so we should expect more change, especially given that this is the main conduit for providing the FCA with data about your firm, and is an efficient way to collect this data.

Financial Crime

Expect to see more action from the FCA as this subject takes on a greater importance given the increase in scams and cybercrime.

The Criminal Finance Act may not directly affect general insurance brokers, but it is still their responsibility to be aware of such matters and have appropriate defences.


The FCA has launched a review into how such markets operate and how they provide the right benefits and outcomes. This will continue in 2018, and we may see a results paper towards the end of the year.


This article is not an exhaustive wrap-up of all issues on the regulatory horizon, but it does serve as a comprehensive overview of what we can reasonably expect.

Should you have any questions, please contact your RWA Business Manager.

About the author

Terence has over 35 years' experience in the Financial Services environment, covering general insurance, investments and mortgages.

Before joining RWA, Terence worked for a large PLC insurance brokerage in Manchester, overseeing some 20 acquisitions. He served as Compliance Director at RWA from 2011 to 2018 and has worked with insurance broking firms of all sizes across the UK. He has a particular interest in Financial Crime and the protecting the insurance broker. Terence previously served as Executive Chairman of the Association of Professional Compliance Consultants (APCC), the professional body for the compliance consultancy sector.

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