Insurance Regulatory eBulletin - Conduct regulation

Regulation round up

On 16 August, the FCA published its monthly Regulation round-up. The Hot Topics included accessible communications for consumers, preparing for Brexit, and new functionality in the Connect system relating to applications. This edition includes the following articles that are relevant to insurers or insurance intermediaries:

• an evaluation of the FCA’s intervention on Guaranteed Asset Protection (GAP) insurance; and
• an update on digital regulatory reporting.

FCA Handbook Notice 57

On 27 July, the FCA published Handbook Notice No. 57, which introduces updates to the FCA Handbook, as approved by the FCA's Board on 28 June 2018, 25 July 2018 and 26 July 2018. The Notice includes the changes to the rules in the Handbook that implement the Insurance Distribution Directive.

The purpose of the changes is to ensure that professional firms which the FCA regulate adhere to similar requirements to those which are regulated by their professional body, in particular with respect to rules on continuing professional development and remuneration. Also, the instrument introduces new guidance on the classification of insurance-based investment products, and amends the form used to notify the FCA of a newly appointed representative.

Global Financial Innovation Network (GFIN): FCA Consultation Document

On 7 August, the FCA, in collaboration with 11 financial regulators and related organisations, announced the creation of the Global Financial Innovation Network (GFIN), building on the FCA’s proposal earlier this year to create a ‘global sandbox’. The network will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. It will also create a new framework for co-operation between financial services regulators on innovation related topics, sharing different experiences and approaches.

The GFIN also launched a consultation on the role it should play in delivering its objectives, including the tools it will use. The consultation sets out the three main functions of the GFIN as:

• acting as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models;
• providing a forum for joint policy work and discussions; and
• providing firms with an environment in which to trial cross-border solutions.

As part of the consultation, the GFIN is seeking views on its mission statement, its proposed functions, and where it should prioritise its activity.

The GFIN are asking for feedback on the consultation by 14 October 2018

FCA Board Minutes: 27 and 28 June 2018

On 9 August, the FCA published the minutes of the FCA Board meeting held on 27 and 28 June 2018.

The minutes cover an update from the Payments Systems Regulator board in respect of a previous meeting, the FCA annual report and accounts 2017/2018, Enterprise Act annual report 2017/2018, monthly reports from independent panels, a report from the Chief Executive Andrew Bailey, the duty of care discussion paper, and the joint FCA and practitioner panel survey.

Claims management companies: recovering the costs of regulation – CP18/23

On 20 August, the FCA published a Consultation Paper (CP18/23) setting out its proposals for recovering the costs of regulating claims management companies (CMCs) when applications open for temporary permissions on 1 January 2019.

On 1 April 2019, the FCA becomes the regulator of CMCs established or serving customers, in England, Wales and Scotland. Firms that wish to continue trading from 1 April 2019 will have to register for temporary permission between 1 January – 31 March 2019. CMCs will subsequently be able to apply for full authorisation. The CP explains how the FCA propose to set the fees that will recover its costs for setting up the new regulatory regime and for supervising CMCs going forward.

Comments on the proposals are requested by 22 October 2018.