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Regulatory Timeline: Overview
Let us help you keep track of the regulatory timelines that impact your business. Our regulatory timeline looks at key announcements and deadlines for all the major FCA, PRA and Bank of England consultations affecting insurance firms, highlighting key deadlines and major milestones that have been announced, with links to the Discussion Papers, Consultation Papers, Interim and Final Reports as well as other major communications from the regulators. The summary below provides an overview of what is on the horizon, or you can delve into the detail on individual pieces of work to see the history as well as the future deadlines.
These are projects that our Directors, team and Talent Pool are involved with, advising clients and providing operational support, so we have first hand knowledge and experience of the issues for firms looking to understand, respond to and implement change resulting from each of these. We’ve included links to the Discussion Papers, Consultation Papers and Policy Statements as well as links to other relevant materials and communications released by the regulators. These are available by following the links to the specific pages from the timeline or the links shown below. If you would like to know more about how your firm should respond, please get in touch.
Consumer Duty
The rules on Consumer Duty came into effect on 31st July 2023. This remains a major hot topic for the FCA and it is proving very active in monitoring the implementation activity of firms, with much of its effort being directed to testing their plans and sharing feedback with the wider market on what it has found. The duty sets out a general Consumer Principle, Cross-cutting Rules and Four Outcomes that reinforce what is already clearly set out in the FCA Handbook.
Culture
Culture, Diversity & Inclusivity covers a broad range of topics, but the one that seems to be exercising the regulatory minds most at the moment is the topic of conduct, or more-precisely “non-financial misconduct”.
The FCA and PRA issued joint Consultation Papers on Diversity and Inclusion back in Q3 2023, with the feedback period ending in December 2023. Final regulatory requirements are expected to be published in a Policy Statement in 2024 with firms then given 12 months after publication of the Policy Statement to prepare. All FSMA firms with a part 4A permission will be in scope, with additional requirements for firms with 251 or more employees. The PRA proposals apply to Solvency II firms, including third-country insurance branches, again with some limitations for smaller firms.
Operational Resilience
In July 2018, the Bank of England, PRA and FCA released a joint Discussion Paper titled “Building the UK financial sector’s operational resilience.”
By 31st March 2022, firms were expected to have completed the first set of milestones towards implementing a functional Operational Resilience framework; identifying their Important Business Services (IBS), setting Impact Tolerances for the maximum tolerable disruption, and having carried out initial mapping. Testing to an appropriate level of sophistication, with an ongoing evolution and enhancement of processes, was expected as time progressed. From the latest update at the end of 2023, firms are now also expected to have made the necessary investments to enable full operationalisation within Impact Tolerances. Lessons learnt exercises to identify, prioritise, and invest in the ability to respond and recover from disruptions as effectively as possible should, by now, have been conducted. The development of internal and external communications plans for when Important Business Services are disrupted should now also be completed. The latest annual Self-Assessment reports are due to be completed for 31 March 2024 with clear progress on implementation expected by the regulators.
Distribution and The Insurance Distribution Directive
The Insurance Distibrution review in its initial form commened with an FCA discussion paper in March 2017. Final handbook rule changes were confirmed in May 2018. Since then, the Lloyd’s market has implemented its own review of practices to determine whether further regulatory work is required and the FCA have continued to look at the effectiveness of implementation of individual elements as part of its review of Conduct Risk, including Product Governance, Customer’s Best Interests and annual training requirements. There are links with the work on General Insurance Pricing Practices and Vulnerable Customers which firms should be conscious of.
General Insurance Pricing Practices
The FCA focus on pricing was precipitated by the Citizens Advice supercomplaint to the Competition and Markets Authority in September 2018. Amongst the 5 markets, Citizens Advice complained that in their view, harm was being caused to consumers through a loyalty penalty in the motor and household insurance markets. The FCA responded with various reviews, culminating in their Policy Statement and Final Rules issued on 24th May 2021. The new rules cover:
- A pricing remedy;
- Enhancements to product governance;
- Rules to offer a range of accessible and easy options for consumers who want to cancel auto renewal contracts;
- Reporting requirements for home and motor insurance markets.
The General Insurance Pricing Practices (GIPP) rules came into effect from 1st January 2022 and had a significant impact on pricing within the home and motor insurance sectors, aiming to tackle ‘price walking’ and to prevent the unfair treatment of loyal and potentially vulnerable customers. In December 2022, the FCA published its findings from an assessment of how firms had risen to the rule changes; findings were mixed, with deficiencies reported in relation to evidencing compliance and record keeping.
All insurance firms should by now be familiar with the rules and annual reporting requirements, and understand the implications for their Product Governance processes and any products which included auto-renewal clauses.
There are links with the work on Consumer Duty, Distribution and Vulnerable Customers which firms should be conscious of.
Vulnerable Customers
The FCA work on Vulnerable Customers started in July 2019. It’s progress has been delayed by the coronavirus pandemic, although it is also the case that the FCA appear to have used firms responses to the pandemic to help test and validate some of its work so far. Finalised Guidance was issued in February 2021 and firms should now be implementing any required changes and ensuring they are able to undertake the monitoring and evaluation of outcomes for vulnerable customers that the FCA require. We expect that they will be undertaking checks on this during 2021.
There are links with the work on Consumer Duty, General Insurance Pricing Practices and Distribution which firms should be conscious of.
FCA Supervisory Portfolio Strategy Letters
The FCA have grouped firms as members of portfolios of firms that share a common business model. The portfolio strategy letters below set out their view of the main risks of harm in each portfolio and the actions the FCA expect firms to take as well as providing guidance on what the FCA will be doing to reduce the level of harm in that sector.
- FCA Personal and commercial lines insurance portflio letter: Insurance Market Priorities 2023-2025 (20th September 2023)
- FCA Wholesale insurance portfolio letter: insurance market priorities 2023-2025 (20th September 2023)
- FCA Life insurance portfolio letter: insurance market priorities 2023-2025 (20th September 2023)
- FCA Supervision Strategy for Lloyd’s & London Market Insurers and Others (LLM). (28th September 2021)
- FCA Supervisory Strategy for Life Insurers (5th August 2021)
- FCA Supervisory strategy for Personal and Commercial line insurers (28th April 2021)
- FCA Supervision Strategy for Lloyd’s & London Market Insurers and Others (LLM) (23rd November 2020)
- FCA supervision strategy for Price Comparison Websites (PCWs) (16th November 2020)
- FCA Supervision Strategy for Lloyd’s & London Market Intermediaries and Managing General Agents (LLMI) (3rd November 2020)
- FCA Supervision Strategy for Personal and Commercial Lines Insurance Intermediaries (4th September 2020)
- FCA Supervision Strategy for Personal and Commercial Lines Insurance Intermediaries (4th September 2020)
- Portfolio strategy letter to firms in the Personal & Commercial Lines Insurer (PL&CL) portfolio: identifying and remedying harms (8th January 2020)
- Risks Life Insurance firms pose to consumers or markets (6th December 2018)
PRA Insurance Supervision Letters
The PRA issue annual supervisory priorities statements.
- PRA Insurance Supervision: 2024 priorities (11th January 2024)
- PRA Insurance Supervision: 2023 priorities (10th January 2023)
- PRA Insurance Supervision: 2022 priorities (12th January 2022)
- PRA Insurance Supervision: 2021 priorities (15th December 2020)
Current Regulatory Issues – Overview
These are matters not addressed in the specific timelines above.
CP5/24 – Review of Solvency II: Restatement of assimilated law
The PRA has published its final consultation needed to implement the conclusions of the Solvency II Review. The deadline for feedback is 22nd July 2024.
FS24/1 Potential competition impacts from the data asymmetry between Big Tech firms and firms in financial services
The FCA has published its Feedback Statement and responses to the Call for Input (CFI), asking for focused information and evidence on whether any data asymmetry between Big Tech firms and financial services firms could influence how effectively competition evolves in financial services markets.
FCA response to the Government’s White Paper on Artificial Intelligence
The FCA has published its response to the Government’s White Paper on Artificial Intelligence.
Speech: Promoting competitiveness is a juggling act
Speech by Sarah Pritchard, Executive Director, Markets and Executive Director, International at TheCityUK International Conference 2024.
PRA: Solvency II Review – Matching adjustment reform implementation considerations for 30 June 2024
The PRA has responded to clarifications requested by firms in their responses to its consultation paper ‘Review of Solvency II: Reform of the Matching Adjustment’, and to assist relevant insurance firms to prepare for implementation of the matching adjustment reforms in a way that makes efficient use of resources and allows firms to make the most of new investment opportunities facilitated by the reforms.
FCA Dear CEO Letter: "Action Needed: maintaining adequate financial resources"
The FCA have written to all firms requesting that they immeidately begin work to assess the adequacy of their financial resources. The letter was issued in the context of the ongoing investigation into historical motor finance commission arrangements, but has been address to all firms.
PRA Business Plan 2024/25
The PRA have published their business plan for 2024/5
FCA Business Plan 2024/25
The FCA have published their business plan for 2024/5
Speech: Investing in outcomes: a regulatory approach to deliver for consumers, markets and competitiveness
Speech by Nikhil Rathi, FCA Chief Executive delivered at the Morgan Stanley European Financials Conference.
PS3/24 – Review of Solvency II: Reporting and disclosure phase 2 near-final
The PRA have provided feedback to responses to consultation paper (CP) 14/22 – Review of Solvency II: Reporting phase 2 as well as Chapter 7: Reporting and disclosure in CP12/23 – Review of Solvency II: Adapting to the UK insurance market.
PS2/24 – Review of Solvency II: Adapting to the UK insurance market
This policy statement provides the PRA’s feedback to responses received to certain parts of Consultation Paper CP12/23 published in June 2023.
The PRA’s approach to insurance group supervision
The PRA have published a statement of policy (SoP) setting out their approach to certain aspects of insurance group supervision under the Group Supervision Part of the PRA Rulebook.
CP2/24 – Solvent exit planning for insurers
The PRA have published proposals for PRA-regulated insurers to prepare for an orderly ‘solvent exit’ as part of their business-as-usual activities and to be able to execute a solvent exit if needed.
PRA Insurance supervision: 2024 priorities
The PRA have published Insurance Supervision priorities for 2024/5
FCA Webinar - Consumer Duty: The next steps
The FCA hosted a webinar on 6th December 2023 to help firms understand the next steps for Consumer Duty.
FCA confirms leasehold buildings insurance reforms
The FCA has confirmed new measures to support leaseholders in the multi-occupancy buildings insurance market with the publication of PS23/14: Multi-occupancy building insurance Feedback to CP23/8 and final rules.
PS23/9: Finalised insurance guidance on supporting customers in financial difficulty’
The FCA have published their Policy Statement and Finbalised Guidance on Customers in Financial Difficulty.
FCA Report - Consumer Duty: Findings from our review of fair value frameworks
The FCA have published the findings of their review into firms’ approaches to fair value assessments under the Consumer Duty.
FCA Business Plan 2023/24
The FCA have published their business plan for 2023/24
Consumer Duty implementation plans - FCA Multi-firm Review
FCA findings from its review of firms’ plans to embed the Duty within their businesses.
PRA Insurance Stress Test 2022 - Results
PRA letter dated 23rd January 2023, setting out the results of the PRA Insurance Stress Test 2022.
PRA Insurance supervision: 2023 priorities
The PRA have published Insurance Supervision priorities for 2023/24
PRA Insurance supervision: 2023 priorities
PRA letter dated 10th January 2023, setting out its priorities for the supervision of life and general insurers in 2023.
Product Governance and Fair Value - General Insurance and Pure Protection
FCA letter to product manufacturers setting out its concerns over the new rules on fair value introduced 1st October 2021.
Product Governance and Fair Value - General Insurance and Pure Protection: Expectations for distributors
FCA letter setting out its concerns over the new rules on fair value introduced 1st October 2021.
The new Consumer Duty - Policy Statement & Finalised Guidance
The FCA have issued Policy Statement PS22/9 and their Finalised Guidance for firms.
Dear Board of Directors Letter: FCA Supervisory Strategy for Personal & Commercial Lines Insurance Intermediaries (P&CLII)
FCA letter setting out its concerns over a number of issues. Firms are requested to consider the extent of these risks in their businesses and act where they identify harm.
Multi-occupancy Building Insurance - FCA Response To Michael Gove
The FCA has responded to the Rt Hon Michael Gove MP providing an update on their work looking into the issues.
FCA: PS22/3: Diversity and inclusion on company boards and executive management
The FCA have issued their Policy Statement on Diversity and Inslusion. This applies to UK and overseas issuers with equity shares, or certificates representing equity shares, admitted to the premium or standard segment of the FCA’s Official List.
PRA Business Plan Published for 2022/23
The PRA have issued their Business Plan for 2022/23.
PRA: CP4/22 Regulated fees and levies: Rates proposals 2022/23
The PRA have issued their proposals for regulated fees and levies for 2022/23
FCA: Strategy 2022 to 2025
The FCA have published their updated Strategy for 2022 to 2025
FCA: Business Plan 2022/23
The FCA have published their Business Plan for 2022/23.
PRA "Dear CEO" Letters: Insurance costs for multi-occupancy buildings
The PRA have written to insurers and intermediaries involved in the placement of insurance for multi-occupancy buildings. Their focus is on distribution costs and ensuring products provide fair value with premiums that fairly and accurately reflect risk.
Letters have been written to Insurers and Intermediaries.
PRA Insurance Supervision: 2022 priorities - Dear CEO letter
The PRA have written to all PRA-supervised firms setting out their supervisorty priorities for 2022.
