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FCA Issues Consultation Paper on Commercial Insurance Regulation
The Financial Conduct Authority (FCA) has issued a consultation paper looking at how Commercial Insurance is regulated. The regulator has requested feedback on whether its existing rules are striking an appropriate balance between safeguarding customers who require regulatory protections and competitiveness. The FCA believes that there may be changes which can be made to better align this balance.
The regulator is seeking views on:
• the application of rules to the commercial insurance market; especially the point at which some rules are disapplied based on the size and nature of the commercial customer.
• the rules which apply to situations where multiple firms are responsible for manufacturing insurance products.*
• the rules which apply to tailor-made (bespoke) contracts.
*Whilst the FCA are only considering possible changes to commercial non-investment insurance market, they are also seeking views on whether these should apply to the retail market as well as to pure-protection products.
The FCA is currently considering a number of options, such as cutting down on the number of definitions of customers. They have also published a Call for Input, seeking views on broader rule changes following the Consumer Duty implementation.
Who does this consultation apply to?
• insurers and insurance intermediaries, including those within the Lloyd’s market
• insurance market trade associations
• commercial insurance buyers
• business representative bodies
Comments on this consultation are expected by 16 September 2024.
More information can be found here: DP24/1: Regulation of commercial and bespoke insurance business (fca.org.uk)