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

Context

The FCA has published its final report in relation to its Pure Protection Market Study; MS24/1.5.  It has also published findings on switching, claims experiences, and fair value in the protection market. Generally, the FCA found that competition works well in the market, but it has reminded firms of requirements and good practice under the Consumer Duty and its product governance rules.  It is not planning new market-wide measures, but will act where firms fall short of requirements and is setting out action to close the protection gap and support consumers.

Key points to note and next actions

• The FCA launched this market study in March 2025 to assess whether competition in the distribution of pure protection products – such as life insurance, critical illness cover and income protection – works well for consumers.
• The FCA has found that competition generally delivers good outcomes for people who hold these products, with a wide range of products available and high claims acceptance rates.
• 58% of people don’t hold any protection products, and 59% of those have never considered their protection needs.  The FCA is concerned where this ‘protection gap’ results from limited consumer awareness and understanding, or from challenges in the sales process making access difficult.
• Subject to sufficient interest, the FCA plans to run a TechSprint in Q3 2027 to explore technology-enabled solutions to close the protection gap.  Expressions of interest are invited by 13 November 2026, and the FCA will confirm by the end of 2026 whether the TechSprint will proceed.  Further details are in Chapter 3 of the Final Report.  Please submit expressions of interest to: PureProtectionMS@fca.org.uk.

Tackling the protection gap

• Those most affected are consumers with more complex needs, less stable incomes, lower financial resilience or fewer opportunities to engage with protection products through established distribution channels. This includes consumers with pre‑existing or complex medical conditions, renters, lower‑income households and people in self‑employment or gig economy work.
• On the demand (consumer) side, there is low awareness and limited understanding of these products. Some consumers do not recognise when protection is relevant to their circumstances or do not engage sufficiently with the potential financial consequences of death, serious illness or incapacity.
• To encourage consumers to consider their protection needs more actively, the FCA has indicated it will work with partners so they can introduce or improve:
  • protection prompts at key life events, such as purchasing a property and planning for future savings and financial needs;
  • nudges for consumers to use tools such as trusts and beneficiary nominations; and
  • consumer awareness initiatives and strengthened adviser engagement.
• On the supply (firms) side, whilst competition has driven improvements over time, there are aspects which can cause issues:
  • A long and complicated sales process can lead consumers to abandon it.
  • Underwriting can be lengthy or complex, medical evidence takes time to obtain, product communications can be unclear, or products may not be available for consumers with more complex needs.
• Some firms told the FCA that they are not always clear whether regulatory requirements allow them to innovate in product design, distribution and consumer journeys.
• To improve access, the FCA will encourage innovations to address complex underwriting and product design, including by running a TechSprint.  The FCA will also support initiatives to tackle delays in obtaining medical evidence. In parallel, it will run a myth‑busting webinar for firms to address any regulatory uncertainties.

A wider consideration is whether this should realistically be the remit of the FCA alone, or whether this is more a societal issue in the way we financially educate our young people, and/or the economic choices made by successive governments which affect the lives of consumers.

Improving price and quality outcomes

• The FCA found a handful of smaller issues, limited in scale and not systemic, but where targeted action could prevent harm or deteriorating outcomes.
• These include some instances where intermediaries may be incentivised to switch consumers unnecessarily and ongoing industry requests for clarity on how premiums can be adjusted for commission.
• The FCA wants the market to deliver consistently strong price and quality outcomes as this will also support greater consumer trust and take up of protection products.  The FCA reminds firms of the requirements under the Consumer Duty (the Duty) and the Product Intervention and Product Governance Sourcebook 4 (PROD 4).
• Having reviewed firms’ fair value assessments, the FCA has set out positive examples and areas for improvement. There is scope for firms to strengthen the evidence underpinning their assessments of target market value and the impact of remuneration and distribution arrangements on consumer outcomes and fair value.

Fair value assessments – positive examples and areas for improvement

Positive examples

• Some firms showed a clear link between the total price paid by customers and the quality of the product and related services. They supported this with both qualitative and quantitative evidence, including analysis by customer cohort, distribution channel, pricing variation and remuneration structure.
• Manufacturers assessed whether commissions, premium loading and other distribution costs were consistent with fair value, including whether non-standard remuneration arrangements were justified by better service or improved customer outcomes.
• The FCA saw good practice where firms compared outcomes across distributors, channels and remuneration models, investigated weaker value metrics, and used governance processes to approve or challenge arrangements that could affect value.
• Some firms monitored the volume and level of non-standard distribution arrangements, and acted where arrangements adversely affected customer value, including adjusting premiums, reviewing remuneration structures or ending distributor relationships.
• Distributors provided stronger evidence where they could explain how commission levels reflected the cost, nature, extent and value of their services, including by analysing costs by marketing channel or insurer.
• Enhanced commission arrangements were more persuasive where firms could demonstrate measurable service benefits, such as improved customer experience, lower early cancellation rates or greater use of trusts and beneficiary nominations.
• Several good practices were noted in relation to ‘Guaranteed acceptance over 50s’ cover.

Areas for improvement

• Some firms could be clearer on how they assessed whether the total price paid by customers, including remuneration and distribution costs, was reasonable against the quality of the product and services provided.
• Firms should strengthen the rationale for thresholds, tolerance limits and customer value metrics used in fair value assessments, particularly where value outcomes appear weaker for certain cohorts, channels or distributors.
• There is scope to provide stronger evidence on the impact of commissions, premium loading and additional distributor fees on the product’s intended value and the customer outcomes delivered.
• Distributors could better evidence the relationship between remuneration and the services they provide, moving beyond high-level descriptions to show costs incurred, service benefits and how remuneration is justified.
• The FCA also identified areas for improvement in relation to ‘Guaranteed acceptance over 50s’ cover, indicating that firms should review whether their assessment of price, quality and customer outcomes is sufficiently robust for this product type.
• Three areas for improvement were noted in relation to ‘Guaranteed acceptance over 50s’ cover.

Firms should review the examples and findings in the report and consider whether they need to improve how they deliver, and evidence, good outcomes for consumers.

Context

The FCA has announced that is partnering across sectors to expand protection insurance coverage for millions of unprotected people in the wake of its MS24/1.5 Pure Protection Market Study final report.  The FCA reports that, whilst the market is working well for consumers who have protection insurance, millions of people remain unprotected.

Key points to note and next actions

• Around 58% of adults have no life insurance, critical illness cover or income protection – and 59% of that group has never considered it.  The FCA’s view is that “millions could be left vulnerable” in the event of a death in the family, serious illness or loss of income.
• To help more people consider whether protection insurance is right for them, the FCA will join forces with partners from industry, government and consumer groups. Actions include:
  • The Money and Pensions Service and the Digital Property Market Steering Group will prompt people to think about protection at key moments – such as becoming a parent or buying or renting a home. The FCA is also exploring how other partners can help put protection on people’s radar when it matters most.
  • The Protection Distributors’ Group will lead a consumer awareness campaign, targeted at groups who are less likely to take out protection products.
  • The Association of Mortgage Intermediaries will lead work to help advisers improve how they discuss protection with their customers.
• The work will focus on groups who are disproportionately unprotected – such as renters, the self-employed and gig economy workers, those on lower incomes and people with pre-existing medical conditions.
• The FCA wants to see greater innovation in this market.  It will hold a webinar for firms to address any misunderstandings about its rules and expectations that may be seen as barriers.  It will also work with the Association of British Insurers to reduce delays in obtaining medical records and is inviting firms to take part in a TechSprint – they should express their interest by 13 November.

Context

The FCA has published a speech given by Steve Smart, FCA Executive Director of Enforcement and Market Oversight, at the Law Society Economic Crime Conference 2026.  The speech draws upon the ‘beehive’ approach to security, inspired by Smart’s visit to the Bank of England Museum’s new exhibition on financial crime.

Key points to note and next actions

• Smart learned how colonies defend themselves by reading signals, sharing information and taking collective action, where every bee gets checked at the door. If something’s off, the colony responds – together, and quickly.  Smart sets out that this same instinct and partnership are what the FCA and partners, industry and Society need to fight financial crime.
• The speech comments on ‘what it takes’, what is changing, and what it means for those who are involved in fighting financial crime:
  • The FCA is ready to take on anti-money laundering (AML) supervision of the legal and accounting sectors.
  • The FCA focus is on criminals, not firms doing the right thing.
  • Partnership is key: Regulators, firms and law enforcement need to work together to make the system harder for criminals to exploit.

Context

The FCA has updated its Consumer Duty focus areas web page to include links to pieces of work that it has published, and further details on existing updated priorities.

Key points to note and next actions

The FCA has prioritised initiatives where:  

• it can share more information on good and poor practice and its expectations to help industry deliver better outcomes;
• it sees the greatest need to address actual or potential harm.;
• it needs more data to understand how firms are embedding the Duty and delivering good consumer outcomes; and/or
• there are opportunities to streamline our rules, reduce burden on businesses and improve outcomes for consumers. 

Links are now included to FCA reviews of the products and services outcome, firms’ approaches to outcomes monitoring, the consumer understanding outcome, Unit-linked pensions and long-term savings, its market study into pure protection insurance, and its market study into premium finance.

Context

Companies House has warned Directors to verify their identities following the first Insolvency Service prosecutions.  The Court action highlights the legal duty on Directors to complete identity verification.  Identity verification is a central part of the Economic Crime and Corporate Transparency Act 2023, which strengthened Companies House powers to improve the accuracy of the company register and tackle the misuse of UK companies for criminal purposes.

Key points to note and next actions

• Newly appointed directors have been required to verify their identity with Companies House before acting as a director from 18 November 2025.
• Existing directors are required to verify during the 12-month transition period, when filing the company’s next confirmation statement.
• This is the first court action for identity verification offences brought by the Insolvency Service.  Three Directors were fined after failing to comply with requirements.
• The convictions serve as a warning to Directors: verify your identity or risk prosecution.  The fines, however, were (including costs and ‘victim surcharges’) £317, £515, and £197!
• Identity verification can be completed online through Companies House free of charge, or via an Authorised Corporate Service Provider.

Context

With International Day of Older People on happening on 1st October, the ASA has taken the opportunity to celebrate older people, but asks “is UK advertising doing the same?”.  In its 2025 research into The Depiction of Older People in Ads, the ASA found that many people aged 55 and over felt advertising too often relied on outdated stereotypes, such as frailty, poverty, forgetfulness, or a lack of technology skills. The research encouraged advertisers to move beyond “over the hill” clichés and reflect the active, varied lives and outlooks of older people today.

Key points to note and next actions

Better representation of this diverse group is welcome, but positive imagery does not remove the need for clear qualifications and explanations.

• A 2025 TV ad for Staysure Travel showed older couples enjoying activities including surfing and trekking. The ad promoted travel insurance for over-50s, and claimed: “There’s no age limit.” Small on-screen text stated: “Terms and exclusions apply”. The problem was that, while there was no upper age limit for buying a policy, the extent of cover did change with age: older customers faced tighter limits on trip duration. The ASA considered that the overall impression of the ad was that cover was available regardless of age on materially similar terms. A general reference to terms and exclusions was not enough: qualifications must clarify the headline claim, not contradict it.
• Similar lessons arose in a group of ads reviewed by the ASA on sales promotions for retirement properties.
• The ASA’s 2025 research noted that some participants felt “bombarded” by ads for funeral services, care homes, mobility aids and similar products. As targeting becomes more sophisticated, this may be difficult to avoid, but as ever, the ASA will guard against misleadingness and lack of clarity.
• In relation to clarity in advertisements, the ASA has examples of TV ads for low-cost “funeral plans made simple”, including a quoted price and claims that consumers could save money compared with a traditional funeral. However, the advertised “funeral plan” covered a non-attended cremation only.  The ASA considered that many viewers would understand “funeral plan” to mean more than a non-attended cremation. Even where wording has a technical basis, advertising must still make the nature of the product clear in the ad itself for the average consumer.

The ASA and CAP will continue to police the grey areas, so everyone, regardless of age, is given the information they need to make informed choices. If firms are not sure their ads include the detail it should, they can get in touch with the ASA’s Copy Advice team for bespoke advice on non-broadcast ads.

Context

The FRC has published final revisions to UK standards on using the work of an auditor’s expert. The FRC revised one UK auditing and one UK assurance standard to maintain alignment with changes made to equivalent international standards issued by the International Auditing and Assurance Standards Board (IAASB). Having single sets of standards which can be used across multiple jurisdictions helps reduce costs for companies in meeting reporting and audit obligations and supports quality and consistency of audit and assurance.

Key points to note and next actions

The FRC has revised ISA (UK) 620 (Revised September 2026) – Using the Work of an Auditor’s Expert and ISAE (UK) 3000 (Revised September 2026) – Assurance Engagements Other Than Audits or Review of Historical Financial Information, to reflect updated ethical requirements in the IESBA Code for using external experts.

The main points include:

• The revisions align audit and assurance standards with new ethical rules on external experts.
• They clarify how practitioners should assess an expert’s competence, capabilities and objectivity.
• They reinforce the need for clear responsibility, evaluation and documentation when relying on expert work.
• The revised standards apply from 15 December 2026.

Context

The ABI has published a ‘guest blog’ from law firm DAC Beachcroft about issues for the insurance industry arising out of automated vehicle (AV) data.  The blog explores the challenges facing the insurance sector driven by the enormous volumes of data AVs will generate.

Key points to note and next actions

• In discussing a ‘data revolution on wheels’, the article considers the vast amount and variety of data that AVs are likely to create from sources including sensors, cameras, mapping systems, vehicle diagnostics, software logs and communications with surrounding infrastructure.
• These datasets will provide a detailed picture of how a vehicle operates, the decisions it makes and the environment in which it travels.  For insurers, the potential value is immense.
• Data will play a critical role throughout the AV ecosystem; manufacturers, regulators and infrastructure providers will rely on and use it for a wide variety of purposes. 
• For insurers, data could fundamentally transform claims handling and risk assessment; when an accident occurs involving an AV, the key questions are likely to require an understanding of software performance, sensor inputs, system decisions and vehicle status at the time of the incident.
• The questions asked may well be very different from those asked today.  Access to reliable and timely data may, therefore, become essential for determining liability, assessing causation and resolving claims efficiently.
• Under the Automated and Electric Vehicles Act 2018, insurers will be directly liable for the AVs they insure when the incident is caused by the AV driving itself.  Without access to the necessary post-collision dataset, insurers may find themselves attempting to investigate highly technical incidents with only a partial view of what happened.
• Automated Passenger Services (APS) are already being tested, with passenger operations expected to go live for passengers in early 2027. The full implementation of the Automated Vehicles Act is currently scheduled for before the end of next year.

Context

The Chartered Insurance Institute (CII) has announced the launch of Voices, a new online research community designed to provide a dedicated space to give insurance and personal finance professionals a stronger role in shaping policy, professional standards and membership services.  Members and non-members are welcome to join.

Key points to note and next actions

• The Voices community will enable practitioners to share real-world insight, ensuring the Institute’s engagement with policymakers, regulators and other stakeholders is grounded in the experience of a broad pool of professionals working across the sector.
• The community will also support the CII Group’s development of standards, learning, products and member services
• Participants will be invited to take part in short surveys and pulse polls, moderated discussions, topic deep-dives, focus groups and interviews.
• Involvement will be voluntary, with participants able to choose the activities most relevant to their interests, experience and availability.
• The Voices community will also have opportunities to submit ideas and articles for The Journal and Personal Finance Professional, and may be invited to attend thought leadership roundtables and panel discussions.
• The community is now open to insurance and personal finance professionals who want to help inform CII research and advocacy activity. Click here to learn more or sign up.

Context

An MGAA press release notes that Charles Taylor Assistance managed a record volume of travel insurance claims in 2025, representing a 24% year-on-year increase, as demand for its claims management and medical assistance services continues to grow. The increase follows significant new business wins from existing and new travel insurer clients. The provider is forecasting a further 12% rise in travel claims during 2026; managed by its UK and Mallorca-based claims and medical assistance specialists as the increasing cost and complexity of travel claims is driving insurers to seek out end-to-end claims management solutions.

Key points to note and next actions

• According to Charles Taylor Assistance, Spain, France and the UK were the top three countries generating travel claims in 2025
• Travel cancellations, medical emergencies and lost or damaged personal effects topped the list of claim causes
• The average value of travel claims managed by the provider in 2025 was £1,458: up 8% on the previous year