The FCA has set out its final rules for simplifying insurance requirements and confirmed a further review on how the regulation applies internationally will take place next year.

The UK regulator said its final rules afford insurance firms more flexibility and responsibility, allowing them to determine how often they conduct product reviews and how much training staff should undertake.

The new measures include:

  • Determining which rules apply to commercial insurance
  • Allowing a lead firm to take responsibility for product design and approval
  • Broadening the scope of, and clarifying, the bespoke contracts exclusion
  • Allowing firms to determine the frequency of product reviews
  • Removing notification and reporting requirements for employer’s liability insurance
  • Removing the minimum required 15 hours of CPD for employees

These come into force today (9 December).

Further streamlining to the insurance rules will take place in 2026, including a review of how the rules and Consumer Duty are applied internationally; there are plans to consult on disapplying Consumer Duty to non-UK business by the end of Q2 2026. This includes reviewing feedback and further engagement to understand the risks and implications of disapplying ICOBS and PROD rules to non-UK business.

The FCA is also proposing a raft of technical changes to simplify its rules following the introduction of the Consumer Duty, including plans to:

  • Remove three further insurance data returns
  • Review eligibility and disclosure rules for packaged bank accounts (PBA)
  • Streamline and simplify rules on collective investment client assets
  • Remove Handbook references no longer needed now Consumer Duty is in force

In addition to these proposals, the regulator has set out wider plans to better support smaller financial firms by creating sector guides to help them apply outcomes-based regulation, starting with consumer credit firms next year. The pilot will inform the FCA’s longer-term approach to supporting smaller firms.

Graeme Reynolds, director of competition and interim director of insurance at the FCA, said: “We’re simplifying and removing rules for insurers and brokers, reducing regulatory costs and helping them focus on delivering better outcomes.

“Our focus on smarter regulation is not once and done, and by using the Consumer Duty we’ll continue to look at rules we may no longer need. We want firms to keep engaging with us on further simplifications for the insurance sector, so we can support growth and innovation.”