The UK’s financial markets watchdog, the Financial Conduct Authority (FCA), is planning to relax regulations on how insurers sell policies to large corporations. This move marks a shift in the regulators’ approach, aligning with the government’s push to prioritize economic growth.
In a statement released on Wednesday, the FCA outlined its intentions to streamline rules for larger businesses, distinguishing them from smaller enterprises when it comes to insurance. The changes are designed to reduce regulatory burdens on firms that insure large corporations, which are better equipped to manage their own risks, while still protecting smaller businesses.
London’s insurance market is a global leader in commercial and specialty risk, generating over $91 billion in premiums annually, according to Lloyd’s of London.
The proposed reforms reflect the government’s broader economic agenda, with the Labour government, in power since July 2024, criticizing previous regulatory efforts as overly restrictive. The government has called for a shift towards supporting economic growth. FCA Chief Executive Nikhil Rathi, who was reappointed to a second term in April, has pledged to place economic growth at the heart of the FCA’s priorities in the coming years.
The FCA’s proposed changes also include several other adjustments:
Insurers will no longer be required to review the value of their products annually. Instead, companies will be allowed to determine review schedules based on the risks and characteristics of their products.
Firms will have more flexibility to appoint a single lead insurer when multiple parties are involved in designing insurance products, ensuring compliance with regulatory rules.
Redundant annual reporting requirements and employer’s liability notifications will be eliminated.
The mandated minimum training hours for insurance employees will be removed.
Some regulations will be limited to UK-based customers.
The FCA has invited industry feedback on these proposals, with a deadline for responses set for July 2.
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