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

Context

The FCA is using its latest Quarterly Consultation to introduce a number of proposed changes, including minor amendments to the anti-greenwashing rule,  increasing the £100 medical condition premium trigger point for firms to signpost customers with pre-existing medical conditions (PEMCs) to a directory of specialist providers and futureproof the threshold in line with inflation, limiting the number of entries in a medical cover firm directory to a single brand per firm, and updating references to the new edition of the UK Corporate Governance Code in the Handbook.

Key points to note and next actions

• In relation to the anti-greenwashing Rule (ESG 4.3.1 R (1) (a), the FCA is removing the defined term communicates and replacing with the same word, but not hyperlinked to the Glossary.  This appears to be correcting an unintended consequence of the defined term limiting the application of that element of the Rule.
• The FCA proposes to increase the medical condition premium trigger (in ICOBS 6A.4.6R(4)) from £100 to £175, so that firms will be required to signpost consumers with a medical condition premium of £175 or more to a specialist directory.  The FCA also intends to periodically increase the medical condition premium trigger to ensure it remains broadly in line with cost increases, linking the medical condition premium trigger to the Consumer Prices Index (CPI) as published on the Office for National Statistics website.  The FCA will also propose to allow firms to adjust the medical condition premium trigger every 5 years based on changes in CPI by applying the ratio difference in CPI between January 2025 and January of that year, rounding down to the nearest whole number.  The FCA will also introduce a formula firms must use to calculate the adjusted medical condition premium trigger.
• In addition, the FCA proposes to limit directory entries to one brand per firm (which will mean that firms cannot be listed under multiple brand names) by amending the Glossary definition of the ‘medical cover firm directory’. The FCA considers that firms listing multiple brands leads to a ‘gaming’ risk with firms seeking to reach a higher number of customers signposted to them by having multiple brands listed.
• The FCA is proposing changes to update Handbook references to the UK Corporate Governance Code 2024 by making minor changes to, amongst others, SYSC, COCON, APER and DEPP. These changes will be of interest to a range of types of firm, including those firms subject to the four Sourcebooks listed.