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

Context

The FCA has made a minor update to its recent ‘Delivering good outcomes for customers in vulnerable circumstances – good practice and areas for improvement’ web page, in Section 4.3.

Key points to note and next actions

• Section 4 of the report addresses consumer understanding, with Section 4.3 setting out some suggested areas for improvement.
• The change is some re-wording under 4.3 in relation to the tailoring of communications and drivers of vulnerability.

Context

The FCA has decided to fine Crispin Odey of Odey Asset Management LLP (OAM) over £1.8m and ban him from the UK financial services industry for a lack of integrity, having issued a Notice of Decision to him on 3rd March 2025. The Notice of Decision, which runs to 30 pages, followed a Warning Notice issued on 1st November 2024. Mr Odey has waived his rights to make representations in the FCA’s internal decision-making process and is referring the Decision Notice to the Upper Tribunal, using an expedited reference procedure. That being the case, neither the ban nor the fine is yet in place.

Key points to note and next actions

The details of this case have been reported previously and can be found in the Notice of Decision. In summary:

• The FCA considers that Mr Odey deliberately sought to frustrate OAM’s disciplinary processes into his conduct to protect his own interests.
• Mr Odey showed reckless disregard for OAM’s governance, causing OAM to breach certain regulatory requirements.
• In addition, the FCA considers that Mr Odey’s behaviour towards both OAM and the FCA lacked candour.
• The FCA considers Mr Odey’s conduct demonstrated that he is not a fit and proper person to perform any function related to regulated activities.
• Following allegations of sexual harassment by two employees, which included an allegation of sexual assault by Mr Odey on a female member of staff in 2005, OAM’s initial investigation identified numerous allegations of sexual harassment by Mr Odey of female members of staff between 2003 and 2020.
• OAM in the process of winding down and is no longer authorised by the FCA.

Context

FOS has published a blog in relation to the customer problems it encounters in dealing with complaints about travel insurance. FOS provides the following guidance for customers to avoid some of the pitfalls it comes across. For travel insurance intermediaries, these issues are perhaps amongst those that you should make clear to customers to ensure good outcomes.

Key points to note and next actions

To help avoid problems with travel insurance and be more prepared for a trip, FOS recommends that customers should:

• Always check the terms and conditions, including any exclusions, to know what’s covered and what’s not.
• Tell the insurer about medical conditions and check what the insurer needs to know about past or current health issues.
• Check the cover for changing flight plans, or for cancelled or missed flights.
• Contact the airline about any lost luggage at the airport or in transit so they can provide a Property Irregularity Report and other evidence to back up any insurance claim.

FOS provides two example case studies:

• A baggage claim
• No insurance cover for the cost of a new flight

Context

The Chancellor of the Exchequer, Rachel Reeves, has met senior figures from a wide range of UK regulators to outline plans to cut the administrative cost of regulation on businesses by 25%. The FCA and the PRA were both represented at the meeting. The plans include the ‘streamlining’ of more regulators (so, much like the PSR, they will cease to exist), and cut across many business sectors (not just financial services). The financial services plans within the published announcement build on the Chancellor’s Mansion House speech last year and the ‘remit letters for growth’ sent to the FCA and the PRA, include the creation of a ‘concierge service’ to help overseas firms get to grips with UK regulations to make it easier for firms to navigate the UK regulatory landscape and create broader barriers to entry.

Key points to note and next actions

The plan contains a number of key pledges from regulators, those from the FCA and the PRA being:

FCA:

• Provide a dedicated case officer to every firm within the FCA’s regulatory sandbox.
• Provide 50% more dedicated supervisors to early and high growth firms, to help them navigate the regulatory system and support their growth.
• Extend pre-application support to all wholesale payments, and crypto firms.
• Indicate more often that the FCA is ‘minded to approve’ start-ups to help them secure funding.
• Simplify its mortgage and advice rules to support greater home ownership.
• Work to review the contactless payment limits, including removing the £100 limit on individual payments.
• Accelerate a review of capital requirements for specialised trading firms.

FCA and PRA:

• HMT will review the FCA’s and PRA to rationalise them and ensure a focus on their priorities.
• Reduce regulatory reporting requirements for firms.

PRA:

• The PRA will consult this April on a matching adjustment investment accelerator aimed at reducing the time between life insurers identifying a productive investment opportunity and making that investment.

One of the five pledges from the ICO is to develop new guidance on international data transfers to support frictionless trade across borders. The ICO will also update its transfer risk assessment tools to underpin the Data (Use and Access) Bill reforms to create a more proportionate and risk-based regime.

Context

Lloyd’s has announced its full year 2024 financial results, which show a continuation of positive returns, with profit before tax of £9.6bn (2023: £10.7bn), consisting of an underwriting result of £5.3bn (2023: £5.9bn) and an investment return of £4.9bn (2023: £5.3bn). The results are described as “…another year of outstanding financial performance…”.

Key points to note and next actions

The key figures reported in Lloyd’s 2024 full year results include:

• Gross written premium of £55.5bn (2023: £52.1bn)
• Underwriting result of £5.3bn (2023: £5.9bn)
• Combined ratio of 86.9% (2023: 84.0%)
• Underlying combined ratio of 79.1% (2023: 80.5%)
• Profit before tax of £9.6bn (2023: £10.7bn)
• Investment return of £4.9bn (2023: £5.3bn)
• Total capital, reserves and subordinated loan notes of £47.1bn (2023: £45.3bn)
• Central solvency ratio of 435% (2023: 503%)

Lloyd’s financial strength ratings are AA- (Very Strong) stable outlook with S&P Global, A+ (Superior) stable outlook with AM Best, AA- (Very Strong) stable outlook with Fitch Ratings, AA- (Very Strong) stable outlook with KBRA.

Context

Which? has published updated research information in relation to insurer premium finance interest rates in home and motor insurance, keeping up its pressure on the FCA whilst the Regulator carries out its premium finance Market Study. The updated research, carried out with 52 car insurers and 46 home insurers, asked what rates of interest the insurers charged customers to pay for cover monthly. The research has found that some car and home insurers are still charging annual percentage rates (APRs) equivalent to typical credit card lenders for customers to pay for cover monthly, despite reminders and commentary that this could be excessive.

Key points to note and next actions

• This is the third time Which? has asked firms to provide this data since March 2024. Among the 24 car insurance firms which disclosed rates in all three surveys, the average APR has reduced slightly – down from 23.14% in March 2024 to 21.03% in February 2025.
• Thirty home insurers responded to surveys conducted in August 2024 and February 2025. Of these, three insurers decreased their rates during this period, and one stopped charging altogether.
• All but three of the car insurers who responded charge extra for paying in instalments. By contrast, half of home insurance firms charge the same price whether you pay all at once or in monthly instalments. Among firms that do charge, rates range widely from 12% to over 30%.
• The average APR across car insurers was 22.84%, with the average APR across home insurers being 21.59%. A number of providers still charge more.
• The highest APRs were between 30.72% and 34.08%
• 22 of the 40 motor insurance providers which responded reported APRs in excess of 20%.