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

Context

Following the publication of its 2025/26 Fees and Levies Policy Statement on 1^st July, the FCA has now published a web page setting out reasons and rationale for fee rate movements this year, compared to last year.  Overall, the FCA’s Annual Funding requirement (AFR) has increased in 2025/26 by 3.8%. The fee rate movements for each fee-block broadly reflect this percentage increase (adjusted for other factors) and the change in total tariff data reported by firms.  

Firms’ actual fees are based on the volume of business (the tariff data) they have reported, so reporting a large change in tariff data this year will also have an impact on actual fees.  Increases and decreases in rates set out below do not necessarily mean, therefore, that firms’ actual fees payable will move the same way.  This is particularly the case for consumer credit firms, where year-by-year minimum fee increases are still impacting many firms.

Key points to note and next actions

Firms’ actual fees are based on the volume of business (the ‘tariff data’) they have reported, so reporting a large change in tariff data this year will also have an impact on actual fees.  The fee movement information in relation to categories of firms UKGI deals with are as follows:

• A019 general insurance distribution – an 8.3% rate decrease – despite the AFR increasing by 2.4%, the 11.5% increase in tariff data has resulted in the fee rate being reduced by 8.3%.
• A022 Principal firms – Appointed Representatives – a 5.0% rate increase – due to tariff data reducing by 1.6% and the AFR increasing by 3.0%, the rate has increased by 5.0%.
• A023 funeral plan intermediaries and funeral plan providers – a 7.0% rate increase – although the AFR has only increased by 0.9%, due to the 18.5% reduction in tariff data, the rate has increased by 7.0%.
• CMC claims management companies – a 15.5% fee rate increase – due to the AFR increasing by 3.1% and tariff data reducing by 9.4%, the fee rate has increased by 15.5%.
• CC01 credit-related regulated activities – Limited Permission firms – a 12.7% rate decrease – despite the AFR increasing by 2.3%, due to an increase of 14.8% in tariff data and the planned phased increase in minimum fees, the rate has been cut by 12.7%.
• CC02 Credit-related regulated activities for firms with ‘full’ consumer credit Permissions – a 12.8% rate decrease – despite the AFR increasing by 2.3%, due to an increase of 14.8% in tariff data and the planned phased increase in minimum fees, the rate has been cut by 12.8%.
• Consumer credit fee increases are explained in a separate section, with a table showing the revised structure of minimum fees.

The FSCS AFR has increased for 2025/26 to £356.0m, up 34.3% from £265.0m in 2024/25

Context

The FCA has published its Finalised Guidance for firms on how to apply a proportionate and risk-based approach to UK politically exposed persons (PEPs), and their relatives and close associates (RCAs), for anti-money laundering purposes.  A PEP is someone holding a prominent public position who is entrusted with prominent public functions either in the UK or elsewhere in the world.  The Guidance follows the FCA’s report, published in July 2024, of its multi-firm review about the treatment of PEPs.

Key points to note and next actions

The FCA is updating its guidance to reflect changes to the legislative framework in the UK since 2017.  In the updated guidance, the FCA:

• clarifies that firms should not treat non-executive Board members of civil service departments in the UK as PEPs;
• reflects changes to The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (Money Laundering Regulations 2017); and
• updates sign off for PEP business relationships. 

The document contains (at Chapter 2) a Feedback Statement following the Consultation in relation to the Guidance, which ran from 18^th July 2024 to 18^th October 2024. The FCA received twenty-six written responses.  The Guidance itself is set out at Annex 1.

Context

As previewed in our weekly update for the week ending 27^th June 2025, the FCA has launched what it describes as “a new and improved Handbook website”.

The FCA assures firms that the new version of the handbook has all the features users are familiar with, but will make it easier to:

• navigate and find the information you need;
• understand the connections between our rules; and
• compare different versions of Handbook text to see what’s been added or deleted over time.

Key points to note and next actions

• The structure and content will remain the same.
• It is currently available as a beta version. You can continue to access the existing Handbook website while the FCA makes sure the new one works as expected. Both Handbook websites will be updated as normal.
• While in beta phase, the FCA will continue to test and refine the website. Firms can provide feedback.
• The FCA expects to fully roll out the new Handbook website later in the year.
• If you have an account on the current Handbook website, you’ll need to create a new account on the new Handbook website. This will enable you to ‘favourite’ key parts of the Handbook and sign up to alerts.
• The new Handbook contains how-to guides and FAQs.

Context

FSCS’s 2024/25 Annual Report highlights another strong year for recovering compensation costs and processing customer claims.  A key milestone included the recovery of more than £56m from the estates of failed financial firms and related third parties – equivalent to 17% of total compensation costs. FSCS also increased its decisions on claims by 21% compared to the previous year, with customer satisfaction remaining high.

Key points to note and next actions

Among the report’s highlights: 

Almost 12,000 decisions were processed through FSCS’s claims service. This included paying £176m in compensation to customers in relation to investments, pensions and financial advice

• FSCS made more than 12,500 payments to customers of failed insurers, with compensation totalling £134m.
• FSCS made more than 20,000 payments to customers of failed credit unions which totalled £17m in compensation.
• In total, FSCS paid £327m in compensation to customers while enhancing its systems to benefit customers and the financial services sector. This included introducing a new electronic payments portal for deposit taker customers – helping some get their savings back within 24 hours of their firm entering insolvency.
• In relation to general insurance distribution, there were no new firm failures for this class during 2024/25. The compensation that FSCS did pay out was in relation to legacy firm failures, and in total this came to approximately £0.7m. This is a slight increase of £0.1m on the compensation paid in 2023/24.  No levies were raised for the General Insurance Distribution class in 2024/25 as surpluses, carried over from 2023/24, met the funding requirements for the year.

FSCS’s Annual Report and Accounts (which summarises the source of FSCS levies and how it has used these funds) and Class Statements (which explains how FSCS allocated the industry’s levy payments during the 2024/25 financial year) are available to download as PDFs.

Context

The ICO is calling for views on a new enforcement approach that could unlock privacy-preserving alternatives to the dominant ad-tech business model.  The proposals – set out in a call for views on how the ICO applies the consent requirements of regulation 6 of the Privacy and Electronic Communications Regulations (PECR) – aim to support innovation by enabling new advertising models that respect user privacy while maintaining revenue streams.

Key points to note and next actions

• The ICO is exploring how publishers could deliver privacy-preserving advertising to users who have not given consent, where the risks are demonstrably low. The regulator will continue to enforce consent requirements for the collection of personal information for targeted advertising.
• Regulation 6 or the PECR states that a firm must not store information, or gain access to information stored, in the terminal equipment of a subscriber or user, subject to the Exclusions set out in Schedule A1 of PECR.  Unless an exception applies, if a firm uses any storage and access technologies, it must:
• tell the subscriber or user what the technologies are;
• explain what they do; and
• obtain prior consent for their use.
• The ICO sees this as an opportunity for new, commercially-viable advertising models that can support innovations to improve consumer privacy.
• The ICO is exploring whether a risk-based approach to enforcing PECR could allow publishers to deliver online advertising to users who have not granted consent, where there is a low risk to their privacy.
• The ICO is clear, though, that there will remain circumstances where online advertising will always require consent (for example, where it involves extensive profiling of people based on their online activity, habits and behaviour, potentially across different services and devices).
• The survey is split into four sections:
  • Section 1: Advertising purposes and capabilities
  • Section 2: Impacts of the approach
  • Section 3: Technical safeguards
  • Section 4: About you and your organisation

Firms can respond to this call for views using Citizen Space and share their thoughts before the consultation deadline of 29^th August 2025.

Context

CBPF has announced that it will exit some broker relationships over the next twelve months as it starts to move away from personal lines business.  It intends to reduce the emphasis on personal lines insurance premium finance to focus on commercial business. If any firms enjoy preferential rates as a result of Network arrangements, they should get in touch with the Network or their usual CBPS account manager.

Key points to note and next actions

• This information is only relevant to customers who purchase insurance from a broker affected by the business changes.
• The announced change in CBPF business strategy means that it will not be continuing to work with some insurance brokers in the future.
• Affected customers will be contacted before their insurance renewal date.  These changes are not happening immediately, and CBPF intends to start contacting customers from October 2025.
• For current customer of CBPF this does NOT impact:
• their current agreement; they should continue to make your monthly repayments in the normal way;
• their insurance policy; or
• their credit rating or credit score for the future.
• This is just a change to the way CBPF works with insurance brokers, and customers don’t need to do anything at this time.
• There is a series of FAQs on the relevant CBPF web page.
• We recommend that impacted firms start to look at how this could potentially impair consumer outcomes for their clients who may be with CBPF (particularly for financially vulnerable customers) and start to approach other premium finance providers in the market and the insurers they deal with so that, when customers are contacted, they have a plan in place.

Context

The CII has published a statement reaffirming its stance on diversity and inclusion, with its tens of thousands of members from around the world unified by its collective mission to secure and justify the confidence of the public in the insurance and financial planning professions.

Key points to note and next actions

• The CII states that its members recognise the pledge they make to abide by its Code of Ethics, which places significant weight on treating all people fairly, regardless of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion and belief, sex and sexual orientation.
• The CII states that its members also know the importance of upholding professional behaviours beyond the confines of their working lives, such that their actions should never bring the financial services professions or the Institute into disrepute.
• The CII is passionate that the insurance profession should be a mirror for the societies they collectively serve and there should be opportunities in insurance and financial planning for all.
• “More diverse workforces are proven to have a positive impact on business, sectors and wider society. In addition, by focusing on ability, we can collectively access a much bigger talent pool.”