The UK markets watchdog is planning to pare its rules on how insurers can sell policies to large companies, the latest signal regulators are pivoting to a more pragmatic stance that leans heavily into the government’s growth agenda.
The changes aim to better differentiate big corporates from smaller businesses that take out insurance, the Financial Conduct Authority said in an emailed statement on Wednesday. The move would “ease the burden on firms insuring larger businesses that can manage risks independently, while protecting smaller commercial customers,” the FCA said.
London’s insurance market is the biggest global hub for commercial and specialty risk, sourcing over $91 billion in premiums annually, according to Lloyd’s of London.
Britain’s Labour government, which came to power in July 2024, has blasted regulators for going too far in their efforts to curb risks and ordered them to turn their attention toward supporting the economy. FCA Chief Executive Nikhil Rathi was given a second term atop the watchdog in April after he vowed to put economic growth at the center of his priorities over the next five years.
Other measures proposed by the regulator include:
- No longer requiring firms to review the value of their product at least every 12 months. Instead, firms would use the risks and characteristics of each product to decide how often they review them.
- Giving firms flexibility to appoint one lead insurer to comply with its rules in instances where more than one party is involved in designing the insurance product.
- Getting rid of duplicative annual reporting and employer’s liability notification requirements.
- Removing the specified minimum hours of training and development required for insurance employees.
- Limiting the scope of some rules to UK customers.
The FCA has asked the industry for feedback on its proposals by July 2.
Photograph: Looking towards the Royal Exchange near Bank Junction from Mansion House Street. London, U.K., on Wednesday, January 17, 2024. Photo credit: Tom Skipp/Bloomberg
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