Professional & Financial Services

Insurer conduct and accountability rules

Alongside the prudential regime, the FCA supervises how an insurer treats its customers and who runs it: senior managers need approval under the SM&CR, retail business carries the Consumer Duty, promotions must comply with the financial promotion restriction, complaints follow the FCA's DISP rules with referral to the Financial Ombudsman, claims must be paid within a reasonable time, home and motor pricing must not penalise loyalty, and you must belong to the Financial Services Compensation Scheme.

UK-wide
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UK-wide

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This guide covers the conduct and accountability side of being an insurer — it applies UK-wide and assumes you hold (or are seeking) permission under insurer authorisation and prudential rules. One scoping point first: a pure reinsurer is a business-to-business firm with no retail customers, so the Consumer Duty, the pricing rules, the promotions and complaints regimes and FSCS protection do not apply to it — the accountability regime and its contract-law duties, including paying claims within a reasonable time, still do.

Put the accountability regime in place

The Senior Managers and Certification Regime applies to all insurers in its dual-regulated form, operated jointly by the PRA and FCA: the PRA approves the prudential senior management functions (such as chief executive and chief finance) and the FCA the conduct ones. Senior managers need pre-approval, certification staff must be assessed annually, and conduct rules apply to almost everyone.

Deliver good outcomes under the Consumer Duty

If you write retail business, the Consumer Duty (Principle 12) is the FCA's overarching standard: products must offer fair value, communications must support understanding, and you must monitor the outcomes customers actually get.

For implementation detail, see FCA Consumer Duty compliance requirements.

Keep promotions inside the financial promotion restriction

Marketing insurance and pension products is communicating financial promotions: as an authorised firm you may communicate your own, but every promotion must be fair, clear and not misleading, and approving promotions for unauthorised persons carries its own rules.

Handle complaints under DISP

Policyholder complaints follow the FCA's Dispute Resolution sourcebook — time limits, final responses, and the right to refer to the Financial Ombudsman Service.

Pay claims and apply contract remedies fairly

The Insurance Act 2015 governs your contracts with commercial policyholders. It gives you a regime of proportionate remedies when a policyholder breaches the duty of fair presentation: avoidance with premiums retained only for deliberate or reckless breach; for other breaches the remedy tracks what you would have done — avoidance with premiums returned if you would not have written the risk at all, the contract treated as including the terms you would have required, or a proportionate reduction of the claim. It also reforms warranty breaches to a suspensory effect. For consumer policies, the Consumer Insurance (Disclosure and Representations) Act 2012 replaces disclosure with a duty to take reasonable care not to misrepresent. And section 13A implies into every contract a term that claims are paid within a reasonable time:

Price home and motor insurance fairly

For general insurers in the home and motor markets, the FCA's pricing rules ban "price walking" — charging renewing customers more than equivalent new customers — and require fair value across your products.

Belong to the FSCS

Authorised insurers participate in the Financial Services Compensation Scheme, the statutory scheme of last resort that protects policyholders if a firm fails, and pay the levies that fund it.

Next steps

Make sure the prudential side is in place — see insurer authorisation and prudential rules — and the shared duties in run a compliant insurance or pension business, then confirm everything with the insurance and pension compliance checklist.