Welcome to the UKGI weekly regulation update service for Aviva ABC brokers

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The FCA has published a statement setting out the terms of reference for the review of their handling of interactions with Mr Simon Andriesz, a whistleblower who had made protected disclosures to them.

Key points to note and next actions

• The FCA has shared its condolences following Mr Andriesz’s passing.
• The review was commissioned by the FCA’s non-executive directors, and is being conducted by Lea Paterson CBE, an independent non-executive director at the FCA.
• The FCA has stated it intends to examine its interaction with Mr Andriesz, and look at their responsibilities under whistleblowing law. They will consider if they followed their own policies and procedures when handling his reports, including his concerns that he had experienced detriment. The review covers the period from at least 2017 to 2026.
• The review is intended to identify any lessons learned and make recommendations to improve the FCA’s future engagement with external whistleblowers and vulnerable individuals.
• A progress update will be provided in January 2027 with the final report expected in Spring 2027.

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The FCA has issued a press release commenting on their expectations for firms making car finance settlement offers.

Key points to note and next actions

• The FCA has noted there is strong demand for early compensation with 89% of car finance customers who have complained (or are considering doing so) wanting the option to receive compensation immediately, rather than wait for the legal challenges to conclude. 86% are happy to receive an offer, and 61% would accept an offer in line with the FCA’s compensation scheme.
• Customers have advised that they want some degree of financial certainty around the scheme, with 77% stating that receiving compensation sooner would make a significant or fair amount of difference to their financial situation.
• The FCA supports lenders who may offer compensation whilst the legal challenges continue, provided customers do not receive less than the scheme provides for. Barclays Premier Finance has confirmed it will make offers to some eligible customers.
• Customers must understand the implications – accepting an offer means keeping the agreed amount, even if a later legal ruling would have resulted in less compensation. Equally, customers cannot claim more if the ruling would have increased their entitlement. Customers can reject an offer and remain within the scheme, but cannot refer settlement offers to the Financial Ombudsman Service.
• The FCA reminds that there is no obligation to accept an early offer and not all lenders will make them. The FCA requires lenders to product a factsheet explaining the terms and will publish updates on participating firms. Customers who have not yet complained should contact their lender directly, and as the FCA has already stated should avoid claims management companies who may charge up to 36% of any compensation. 

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The FCA has published a blog commenting on how they are talking to firms to prepare for “post-quantum cryptography”.

Key points to note and next actions

• Mark Francis, Director of Specialists at the FCA, has written a commentary on the FCA’s approach to quantum computing, whereby powerful computers could break the encryption and security systems used by financial firms, which could put customer data, payments and financial markets at risk.
• He states that firms should prepare now, as it’s not clear when this technology could become a real threat. Financial firms must start to identify where they use encryption and other security measures, and plan how to replace them with quantum-resistant technology.
• The National Cyber Security Centre (NCSC) has recommended some key deadlines firms should adopt:
  • Complete a migration plan by 2028.
  • Complete high-priority system upgrades by 2031.
  • Move all systems, services and products to quantum-resistant cryptography by 2035.
• Senior Management must take responsibility – firms must invest sufficient time, money and resources to manage the transition safely, with clear plans, regular testing and ongoing monitoring. Mr Francis notes that poorly managed technology changes could create additional operational risks.
• The FCA will support and monitor progress. It is trialling a self-assessment tool to help firms evaluate their readiness, share good practice and identify common challenges. It also plans to consult on further cyber resilience guidance.

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The FCA has announced a new initiative will bring together firms, quantum technology providers, and national research labs to explore practical applications of quantum computing.  The FCA will bring together financial services firms, quantum technology providers and national research laboratories to explore how quantum computing could help tackle financial crime.

Key points to note and next actions

• The Quantum Experimentation Group, the first of its kind for a regulator, will initially explore how quantum machine learning could help detect money laundering and fraud. It will launch in the first quarter of 2027.
• Participants will use an FCA synthetic dataset – artificially generated data – to help overcome a key barrier to testing: access to suitable data.
• The group will help firms explore practical uses of quantum computing in financial services and share findings to guide future testing. It will also help the FCA understand the technology’s opportunities and limitations, barriers to experimentation and what these could mean for regulation.
• The initiative builds on the FCA’s research into the long-term potential of quantum computing in financial services.
• Financial services firms, quantum technology providers and national research laboratories can register their interest in joining the group by 31 December 2026.

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The FCA has published a blog by Sarah Pritchard, FCA Deputy Chief Executive, exploring the importance of reviewing whether existing rules and requirements are working, and not just on whether new rules are required.

Key points to note and next actions

• The FCA reviews its Rules because markets evolve, consumer behaviour changes, and technology creates new opportunities and risks. Rules that were appropriate when they were introduced may need to be updated, simplified or, in some cases, removed altogether.
• The blog explores how the FCA reviews its rules, sometimes under its formal Rule Review Framework.  The blog explores the FCA’s methodology and how reviews how rules are affecting firms, consumers and markets through its ongoing supervisory activities, data monitoring, market studies and calls for evidence.
• The blog includes some examples of Rule reviews including in the mortgage market, and in relation to the Senior Managers and Certification Regime.
• The FCA explains that it uses external input from firms and consumers.
• The article sets out three key reasons why Rule review matters:
  • Effectiveness – reviewing the FCA’s work helps keep regulation effective and proportionate.
  • Learning – it helps the FCA become a smarter regulator.
  • Accountability – stakeholders rightly expect regulators to act where there are potential harms or opportunities to make markets work better.

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The FCA has published the minutes of its Board meeting on the 24 September 2026.

Key points to note and next actions

• AI is a major strategic priority. The FCA is progressing its response to the Mills Review recommendations, aiming to encourage the safe and responsible use of AI across financial services. The FCA plans to expand its AI capabilities, with investment expected through to March 2028. Progress will be regularly reviewed with spending and priorities adjusted according to benefits, risks and technological developments. Security, accountability and resilience are key considerations.
• The Board approved Liam Coleman as its preferred candidate for the permanent Chair of the Financial Ombudsman Service, for an initial three year term from 10 October 2026, subject to Treasury approval.
• The Board also approved updates to the UK Listing Rules to align reporting requirements with the UK’s Sustainability Reporting Standards (UK SRS), replacing reference to the previous climate disclosure framework. A proportionate approach for smaller companies will be maintained.
• The Board discussed other wider operational and regulatory priorities and reported that overall operational and financial performance remained broadly on track, though there are some capacity and skills pressures which remain.

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The FCA has published a Notice of Decision in relation to Archer Insurance Services Limited cancelling the firm’s Permissions.

Key points to note and next actions

• Information submitted to the FCA by the firm in regulatory returns for the period 1 April 2024 to 31 March 2026 shows that the firm was not carrying on any regulated activities for which it holds a Part 4A Permission.
• There are no other matters that suggest the firm is carrying on regulated activities.
• The firm has failed to pay periodic fees and levies owed to the FCA.  In particular, the firm has failed to pay invoices dated between 3 July 2024 and 2 May 2025 for periodic fees and levies of £2,757.66, which had been due for payment on various dates between August 2024 and June 2025.

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The FCA has published two linked Final Notices in relation to Adelphi Special Risks Limited and Cyber Quote Limited, cancelling both firms’ Permissions.  Both firms shared common Directors and the same registered office address.

Key points to note and next actions

• The firms failed to complete and submit a string of returns including RMARs, CCR returns, complaints returns and CCR complaints returns between February 2021 and February 2026.
• Enforcement action against both firms commenced in May 2024, which was suspended temporarily when the firm submitted some of the missing returns.
• Enforcement re-commenced, and the FCA sent a final demand for the missing returns in January 2026.
• It was not until 2 June 2026 when the FCA sent both firms a Letter before Action, informing the firms that their Permissions would be cancelled.  The FCA has heard nothing further from either firm.
• As a result, the FCA is not satisfied that either firm is fit and proper, including whether the Firm’s business is being managed, or is to be managed, in such a way to ensure that its affairs will be conducted in a sound and prudent manner.  This is because both firms:
  • failed to respond to the Information Requirements;
  • failed to comply with the relevant regulatory reporting rules;
  • failed to co-operate with the FCA’s repeated requests for the Returns to be submitted, in breach of Principle 11;
  • have not demonstrated that they are ready, willing and organised to comply with the requirements of the regulatory system;
  • have failed to deal with the FCA in an open and co-operative way; and
  • are therefore failing to satisfy the FCA that their business is being managed in such a way as to ensure that its affairs will be conducted in a sound and prudent manner.

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EIOPA has published its October 2026 Insurance Risk Dashboard. The main findings show that market and cyber risks remain high amid a geopolitically complex environment. This Insurance Risk Dashboard, based on Solvency II data, summarises the main risks and vulnerabilities in the European insurance sector. The data is based on financial stability and prudential reporting collected from 95 insurance groups and 2092 solo insurance undertakings.

Key points to note and next actions regarding Risks

• Macroeconomic: Medium risk, with a worsening outlook due to geopolitical uncertainty and pressure on sovereign debt from rising interest rates.
• Credit: Stable, supported by high-quality assets; financing costs and private credit quality remain areas to monitor.
• Market: Elevated amid bond market volatility, potential market corrections and geopolitical tensions.
• Solvency and profitability: Stable at medium risk, with broadly unchanged capital positions and mixed profitability.
• Insurance: Reduced to low risk, supported by strong premium growth and improved loss ratios.
• ESG: Largely stable, but supervisors expect deterioration over the next 12 months.
• Digitalisation and cyber: Elevated and worsening, driven by advanced AI, geopolitical spillovers and cyber underwriting exposure.

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The CMA, as part of its recent review of existing Orders and Market Remedies, has revoked entirely the Payment Protection Insurance (PPI) Market Investigation Order 2011 (as varied 2018).  None of the existing provisions under this Order remain.

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An NCSC assessment has examined current AI-enabled threat trends and projections of the threat landscape to 2028 through three scenarios.

The scenarios are assessed to be plausible possibilities but are not predictions. They are designed to provide insights into the potential trajectories of AI-driven cyber threats and inform the development of proactive security strategies. Development in AI capability and its application to cyber operations is changing quickly and therefore the prospect for surprise is high. The NCSC warns that ‘tech on the cheap’ has left UK organisations exposed to AI uncovering and exploiting longstanding cyber security weaknesses and calls for urgent investment in resilience. NCSC CEO Richard Horne has launched the Annual Review 2026: The State of the Cyber Nation.

Key points to note and next actions

To develop the three scenarios in this paper, the NCSC has identified key drivers likely to influence the AI-cyber threat to the UK in 2028 and these are Geopolitical tensions; UK critical national infrastructure (CNI) cyber defence; the pace of development for AI technologies; availability of AI-cyber capability; AI and a cyber-literate workforce and AI-cyber threat in 2028. The three scenarios in the NCSC assessment are:

• Baseline scenario: Increased global threat from AI-cyber capability.
• Pessimistic scenario: AI-cyber capability proliferation far outstrips the UK’s defensive ability.
• Optimistic scenario: AI-cyber development slows, allowing the UK to develop robust countermeasures.

The key judgments are:

• By 2028, Russia, China and other nation states are highly likely to routinely use AI-enabled cyber capabilities to pursue their geopolitical goals, increasing the scale and speed of sophisticated cyber-attacks against the UK.
• By 2028, many systems are likely to remain vulnerable to attack from AI-cyber tools which identify and exploit system weaknesses.
• By 2028, it is likely that attackers will apply AI-cyber capability against known vulnerabilities in CNI legacy technology.
• It is highly likely that between now and 2028, AI-powered malware will have been used in a ransomware attack on UK CNI.

NCSC CEO Richard Horne urges all organisations across the country to “take the responsibility now to make different choices”, including addressing the failure to adequately invest in their technology; not having technology unnecessarily connected to the internet; and making Cyber Essentials the starting point for cyber security, not the end goal, with organisations building greater resilience according to their size, complexity and risk.

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At the mid-point of ASA’s five-year strategy on AI-assisted, collective ad regulation, the assumptions and priorities that shaped it have been reviewed and the ASA has published an updated version to guide its work until 2028. 

Key points to note and next actions

• The revised strategy responds to advances in AI, fraudulent advertising, inappropriate targeting of children and changes in online regulation.
• A proactive approach uses technology and collaboration with regulators and the advertising industry to tackle irresponsible adverts.
• January–June 2026 results: Scanned 40 million ads and potential ads, secured amendments or withdrawal of 2,301 ads, and invested 60% of direct service resources in proactive and preventative work.

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Lloyd’s has announced changes to its operating model designed to reduce complexity and the cost of doing business in its market, while preserving its world-leading standards of oversight. This delivers on the strategic commitment made in March to make Lloyd’s a more efficient and flexible marketplace. 

Key points to note and next actions

• Lloyd’s is bringing all elements of oversight – including governance, performance, reserving and syndicate-level capital setting – into a single Oversight and Performance function. This is designed to make oversight more consistent, coordinated and predictable for managing agents, reducing unnecessary bureaucracy while maintaining the rigorous oversight that is the bedrock of the market’s reputation and competitive strength.
• Building on the strong momentum behind its strategy, Lloyd’s is also making several further organisational changes to lay the foundations for its longer-term ambitions.
• The Corporation is introducing a global functional model to provide greater consistency in how it works in all its offices around the world. The new model will deliver increased scale benefits, with local leaders empowered to maximise the advantages of Lloyd’s while holding regulatory and strategic accountability.
• The capital modelling and aggregation teams will report to Chief Financial Officer Jim Bichard, who is also a member of the Council, strengthening the Corporation’s focus on protecting, deploying and extending Lloyd’s unique capital advantage.

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According to the latest Property Insurance Tracker from the ABI, the average home and business insurance payout reached a record £10,000 for claims across July, August and September 2026.

Key points to note and next actions

• The number of claims fell, but payouts rose: Home and business claims dropped 4% to 142,000, while payouts increased 1% to £1.5 billion, driven by higher repair costs and more severe weather damage.
• Major claim costs remained high: Average domestic claims reached £38,000 for fire, a record £20,000 for subsidence and £28,000 for flooding.
• Subsidence claims hit a record: Insurers received 13,000 new domestic claims between July and September 2026, up from 8,000 in the same period in 2025, following prolonged hot, dry weather.
• Warning signs: Homeowners should seek advice about sudden or diagonal cracks, particularly those wider than 3mm or wider at the top.
• Premiums were broadly stable: Average annual home insurance cost £329 in Q3 2026, unchanged year on year but £4 higher than Q2. Combined cover averaged £389, while buildings-only and contents-only premiums fell year on year to £310 and £118 respectively.

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Women’s sport is growing through record audiences, increased investment and wider participation

Key points to note and next actions

Upcoming international events, such as the Women’s T20 Cricket World Cup, the Tour de France Femmes in 2027 and the UK bidding to host the 2035 FIFA Women’s World Cup are expected to sustain this momentum. Supporting infrastructure, including insurance, needs to develop alongside the sport to meet female athletes’ needs.