| Link(s): | CP25/37: Targeted clarifications of Handbook materials | FCA CP25/37: Targeted clarifications of Handbook materials |
Context
Alongside its Policy Statement in relation to simplifying the insurance rules, the FCA has published a Consultation Paper CP25/37 outlining its proposals for further targeted clarifications of FCA Handbook materials. The Consultation seeks views on FCA proposals to simplify its requirements, while ensuring it continues to support and protect customers.
Key points to note and next actions
The Consultation proposals are designed to:
- Resolve uncertainty in FCA rules and guidance, that have been wholly or in part superseded.
- Introduce greater proportionality and clarity to existing rules.
- Resolve clear cases of conflict and duplication in FCA rules.
- Seek views on how the FCA could enhance its support for smaller firms.
Insurance intermediaries, insurers, Lloyd’s managing agents and firms which provide funeral plans are included within the list of organisations that the proposals would apply to.
- Chapter 5 addresses simplifying insurance and funeral plan rules, including:
- Removing PPI-specific rules on customer eligibility (ICOBS 5.1.2R and ICOBS 5.1.3G), as these requirements are now addressed by ICOBS 5.1.1G and the Consumer Duty.
- Removing the rule requiring firms to draw customers’ attention to the importance of reading documentation (ICOBS 6.4.5R), as this is now addressed through the Duty’s Consumer Understanding outcome.
- Clarifying existing non-product specific guidance in ICOBS 5.1.1G to confirm that firms must take reasonable steps to ensure customers only purchase policies under which they are eligible to claim benefits.
- Removing the additional expectations (contained in PROD 4.5) for manufacturers and distributors in relation to value measures data. This would involve deleting PROD 4.5, because its requirements are now fully addressed elsewhere in FCA rules – particularly through the broader and more detailed provisions in PROD 4.2 and 4.3.
- Proposing to remove the minimum 12-month product review requirement for funeral plan manufacturers.
- Proposing to delete ICOBS 6B.2.57 R which requires firms to share pricing records with the Senior Manager responsible for reporting to the FCA. These records relate to compliance with pricing rules, including renewal pricing practices and fair value assessments. This rule was originally introduced, in 2022, to support the General Insurance Pricing Attestation (REP022), which required senior managers to confirm compliance with pricing requirements, but which has subsequently been decommissioned.
- A ‘Smaller Firm Guide Discussion’ appears in Chapter 6 of the Consultation, which sets out proposals for further smaller-firm guidance in the form of issue-specific guides, Directory-style guides, and the enhanced use of good and poor practice documents.
- Chapter 7 of the Consultation addresses updating and removing references to Principles 6 and 7 and Treating Customers Fairly. The proposals include:
- Retiring the Guide on the Responsibilities of Providers and Distributors for the Fair Treatment of Customers (RPPD).
- Considering the ongoing status of historic FSA publications in relation to TCF, and the FCA’s Fair treatment of customers web page, which includes the outcomes set out under the TCF initiatives, comments on Principle 6, and several other points on firms’ treatment of customers.
- Updating references to reflect the new standards expected under the Consumer Duty which may be higher than those under Principles 6 and 7.
- Updating references to clarify the scope of Principles 6 and 7 which still apply where the Consumer Duty does not.
- Replacing the references to Principles 6 and 7 with a reference to the Consumer Duty. These references apply solely to retail markets and accurately convey rules and expectations under the Consumer Duty.
- Removing references to Principles 6 and 7 without replacement where appropriate. This includes a proposal to retire the guidance provision at DISP App 3.4.3G which relates to handling of payment protection insurance complaints.
- Annex 1 includes a full list of the questions asked throughout the consultation. Please send your comments to ReviewOfRequirementsCFI@fca.org.uk by 27 January 2026.