FCA expands insurance work in response to Which? super complaint
AI Analysis
The FCA is expanding its planned supervisory work in home and travel insurance markets in response to a Which? super complaint, focusing on improving claims handling, information provision, and overall standards. This matters for compliance professionals as it intensifies scrutiny under Consumer Duty, requiring firms to demonstrate better consumer outcomes amid ongoing simplification of insurance rules. It signals heightened FCA expectations for evidence-based improvements in customer satisfaction and transparency.
Key dates
- Over the next year (from publication, approx. late 2025)
- - FCA to conduct expanded reviews on claims handling, information provision, and standards improvement
- 2026
- - FCA to decide on changes to GAP insurance product-specific rules
- Q2 2026
- - FCA consultation on removing non-UK customers from Consumer Duty scope, with parallel review of ICOBS and PROD application
- H1 2026
- - FCA consultations on Consumer Duty amendments for distribution chains and UK customer focus
- September 2026
- - Conduct Rules (COCON) expand to non-financial misconduct
Suggested considerations
- Review and enhance claims handling processes to ensure efficiency and fairness, preparing evidence for FCA supervisory reviews.
- Improve pre-sale information on policy quality, addressing gaps where 31% of consumers lack sufficient data.
- Adopt risk-based product and distribution reviews (per PS25/21), documenting rationale for frequency based on harm risks; align with co-manufacturers.
- Embed Consumer Duty via outcomes monitoring, data-driven MI on customer behavior/complaints, and vulnerability support; shift from process compliance to evidenced effectiveness.
- Retain records, respond to FCA data requests, and invest in governance/MI for supervision.
- For bespoke contracts, ensure clear documentation of customer-specific design.
What changed
- This statement announces an expansion of existing planned work rather than new rules, with specific emphases over the next year on:
- Improving claims handling through reviews of firms' processes.
- Enhancing information available to consumers for judging policy quality (addressing the 31% dissatisfaction rate).
- Building on prior simplification efforts, such as risk-based product reviews (replacing annual mandates), removal of prescriptive CPD requirements (e.g., 15 hours), and reduced data returns, as finalized in PS25/21. No immediate new requirements are
Compliance impact
Urgency: High - This expands active FCA supervision in 2026, overlapping with Consumer Duty embedding and insurance simplification; non-compliance risks intensified reviews, enforcement, or redress schemes (as seen in motor finance). Firms gain flexibility but face accountability for outcomes, with scrutiny on data quality and vulnerability handling amplifying risks in a trust-based regime.
Who is affected
Related regulations
References
AI-generated analysis. May contain errors or omissions — verify with the original FCA source before acting. Full disclaimer.
What the FCA said
We're expanding the significant work we had planned to improve standards in the home and travel insurance markets, following Which?’s super complaint. Read our response to Which? (PDF)While 79% of consumers who make an insurance claim are satisfied with how it was handled, our work shows there's room for improvement …
Extract from FCA . Read the full notice at the source for the authoritative text.