Introduction: David Geale, Director of Policy
Welcome to the October edition of Regulation round-up. I’d like to take this opportunity to highlight our work to implement the Insurance Distribution Directive (IDD) in the UK.
The IDD was finalised at European level in February 2016 and needs to be implemented in the UK by 23 February 2018, replacing the Insurance Mediation Directive (IMD). It aims to enhance consumer protection when buying insurance – including general insurance, life insurance and insurance-based investment products (IBIPs) – as well as to support competition between insurance distributors by creating a level playing field. Last month we published our third and final dedicated IDD consultation paper, as well as the first of three Policy Statements.
The IDD is wide-ranging in its scope. The key areas it covers include:
- professional and organisational requirements which apply to all insurance distributors, as well as prudential requirements which apply only to insurance and reinsurance intermediaries
- conduct of business, and product oversight and governance requirements for all insurance business
- additional conduct of business requirements for IBIPs business.
If your business involves insurance distribution it will be affected by the changes brought in by the IDD. You need to ensure you are compliant with the new rules when they come into force on 23 February 2018. This includes the directly-applicable delegated regulations (one covering product oversight and governance, and the other covering conduct of business rules for IBIPs recently adopted by the European Commission. Your preparations should be well underway by now, with only four months to go.
We encourage you to let us know what you think by responding to CP17/33 by 25 November 2017. Look out for our remaining Policy Statements, planned for December 2017 and January 2018, as you finalise your implementation plans.
Hot topics
Consultation on the Extension of the SM&CR closes soon
We are currently consulting on the extension of the Senior Managers and Certification Regime (SM&CR) to all FSMA authorised firms. This consultation will close on 3 November 2017.
We believe that holding individuals to account is a key component of effective regulation. The SM&CR currently applies to deposit takers and, following the Bank of England and Financial Services Act 2016, is now being extended to insurers and solo-regulated firms.
It replaces the current Approved Persons Regime, changing how individuals working in financial services are regulated. The aim of the new SM&CR is to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.
As part of this, the SM&CR aims to:
- encourage a culture of staff at all levels taking personal responsibility for their actions
- make sure firms and staff clearly understand and can demonstrate where responsibility lies
This consultation papers set out our proposed approach to the extension of the SM&CR as well as some minor proposals for the existing banking regime. For information on how to comment on the proposals before the deadline of 3 November 2017, please see our main SM&CR page.
Consumer Credit
Debt Management – Thematic Review
We are undertaking a thematic review of the debt management sector, in line with the commitment in our 2017/18 Business Plan. We want to understand how providers across this sector are meeting the needs of their customers, following our interventions in the market and other changes since our last thematic review.
Our review will be based on a sample of both fee-charging and free-to-customer debt management providers. We will look at the outcomes for customers from the service they are given as well as the initial advice process. We want to understand where there is good practice that is helping consumers to achieve positive results in dealing with their debts, as well as identify areas for improvement.
Findings from the FCA’s Financial Lives Survey 2017
We’ve published the findings of our Financial Lives 2017 survey. Drawing on responses from just under 13,000 adults in the UK, Financial Lives is the FCA’s largest tracking survey on consumers and finance. It reveals a wealth of information about different types of consumer and their experiences of financial products and services.
Financial Lives is one of the key sources of information that underpins our consumer protection work. It also provides valuable insights for any organisation focusing on consumers and finance. To provide greater access to the findings, alongside the report we have also published a set of weighted data tables showing the results from the full survey and a guide on how to use them.
Policy Statement 17/3: new obligations on firms concerning PPI complaints in light of Plevin
On 29 August 2017, a new rule came into force setting a deadline of 29 August 2019 for consumers to make new complaints about PPI.
New rules and guidance also came into force concerning firms’ handling of PPI complaints in light of Plevin (the Supreme Court’s decision in Plevin v Paragon Personal Finance Limited in November 2014)
Firms that have, before 29 August 2017, handled and rejected PPI mis-selling complaints must write to all such previous complainants where the consumer may now be eligible for redress under Plevin. Firms must send these letters to consumers before 30 November 2017.