Context
The FCA has published a new web page outlining its Consumer Duty focus areas for the remainder of its 2025/26 financial year, along with a new “Consumer Duty requirements review: update” web page. The FCA is relying on the Duty as much as possible rather than creating new prescriptive rules. That being the case, for the FCA, the successful embedding of the Duty by firms across all sectors is critical in avoiding the need for future prescriptive regulation and for ensuring that consumers are supported. Alongside these priority areas, the FCA has also published a programme of action to simplify its requirements following the introduction of the Duty, to give more flexibility, predictability and improved efficiency for firms.
Key points to note and next actions
The Duty focus areas for 2025/26 cover thematic, multi-firm and market-wide work, relevant to a wide set of stakeholders. 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
- there are opportunities to streamline its rules, reduce burdens on businesses and improve outcomes for consumers.
In 2025/26 the FCA has four cross-cutting projects (i.e., across all sectors) in relation to embedding Consumer Duty and sharing good practice:
- A review of products and services outcome: how firms are designing products and services to meet customer needs, including those with characteristics of vulnerability.
- A review of firms’ approaches to outcomes monitoring: how firms are responding to the FCA’s outcomes monitoring requirements.
- A review of firms’ customer journey design: looking at the design and delivery of firms’ customer journeys to ensure customers’ needs are met, with a particular focus on how firms apply friction throughout the journey.
- A review of the consumer understanding outcome: how firms’ communications are helping consumers make informed decisions.
Together with the ICO, the FCA will provide further clarity in Q1 2026 on the interaction between how firms can meet their vulnerability, data sharing, and data protection expectations.
In relation to supporting firms to deliver good price and value outcomes, the FCA will continue with its reviews and market studies into pure protection insurance, unit-linked pensions and long-term savings, and premium finance.
Other than the above, there are no sector-specific priorities which involve insurance distribution.
The requirements review update page contains some useful and, in places, detailed commentary in relation to streamlining regulatory requirements, including commentary on:
- clarifying how the Duty applies to firms in distribution chains;
- providing clearer guidance on the scope of rules, including the Duty;
- improving consistency in rules and definitions; and
- updating legacy disclosure rules.
The FCA’s ‘in-progress commitments’ include:
- A review of the international application of its insurance conduct rules – the FCA sought input in its May 2025 CP25/12: Simplifying the insurance rules on how it might disapply elements of its conduct rules for international business. It will consult on disapplying the Duty in respect of business with non-UK customers in mid-2026, aiming to publish a Policy Statement in Q4 2026.
- Simplifying the rules for insurance and funeral plans – in the May 2025 CP25/12 referenced above, the FCA consulted on proposals allowing firms greater flexibility over how often they review value under product governance rules, co-manufacturing arrangements, and changes to which rules apply to commercial insurance. The FCA will issue a Policy Statement in Q4 2025.
- Guides for smaller firms – the FCA committed to piloting a guide to help support smaller firms with outcomes-focussed regulation, so firms could see all of the FCA’s requirements in one place. The pilot is planned for consumer finance firms in Q1 2026, in which the FCA will seek views on its approach in its Q4 2025 targeted clarification consultation.
- An interim Supervisory Notice on the FCA’s supervisory approach to co-manufacturing, including its relationship to the distribution chain, to be published in Q4 2025.
The FCA has also stated that it is currently reviewing insurance premium pricing returns, and that it will update the market in Q1 2026, before the next reporting window.