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September 1, 2026
The FCA Financial Services Consumer Panel (FSCP) has published responses to two FCA Consultations, CP26/22 (Simplifying the Insurance Rules) and CP26/23 (Consumer Duty – scope and proportionality).
Broadly, the Panel supports the FCA’s ambition set out in CP 26/22 of reducing consumer confusion and information overload by removing mandatory disclosures that do not help consumers choose policies, whilst enabling and supporting the improvement of consumer confidence, understanding and capability.
In relation to CP26/23, the Panel has opted to respond to some of the questions posed in the Consultation, even though the proposals within it are centred on firms and seek to refine the application of the Consumer Duty.
Simplifying the insurance rules
The Panel recognises:
- most retail general insurance products are now purchased online, and supports greater personalisation of digital communications; and
- removing the overlapping definitions of advice in the retail general insurance market and clarifying the boundary between a true personal recommendation and a simple non-advised sale is helpful.
The Panel believes that AI adoption, and indeed Consumer Duty outcome requirements, should require firms to proactively signpost to other service providers where they are unable to meet a consumer need and/or a support/service requirement.
The Panel urges the FCA to:
- be mindful that, whilst most consumer retail general insurance policies are today purchased online and on a non-advised basis, this is not the case in relation to pure protection insurance where most sales made result from engagement with an adviser and the provision of a personalised recommendation; and
- continue to stress to financial services firms that, irrespective of the type of sales and product, firms must pay due regard to the information and support needs of their client, particularly where they are digitally excluded, vulnerable and/or requiring reasonable adjustment.
Consumer Duty – scope and proportionality
The Panel:
- stresses that consumer protections and the foundational customer understanding, fair value, good service and support outcomes of Consumer Duty must be preserved.;
- welcomes clearer accountability for consumer outcomes across multi-firm distribution chains;
- asks that the operational cost savings released because of this CP’s proposals should be recycled to improve consumer value and benefits; and
- recommends greater clarity, in relation to the allocation of risk between firms in the distribution and/or manufacturing chain, on who the consumer complains to and how would they be able to determine this. The Panel asks how the consumer avoid being passed between, for example, the primary and secondary manufacturers.
In relation to the specific questions in the Consultation, the Panel comments specifically on two issues:
- The Panel suggest that both Pure Protection and Health Insurances are brought within scope of the FCA’s proposal as the protection was purchased when the consumer was resident in the UK (response to Q. 5).
- The Panel welcomes the FCA providing clarified guidance to firms to reflect that they may act differently to support customers in vulnerable circumstances depending on their role within the distribution chain with firms closer to the customer having more direct responsibility for identifying and responding appropriately to vulnerable customers’ needs (response to Q. 21).
ICS receives queries related to Consumer Duty and insurance rules on a daily basis, so please contact us on .
