Insurance Law, Regulation and Market Conduct
Regulatory architecture
Candidates must know the role of the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) in the UK, or the equivalent split in other jurisdictions. The PRA focuses on safety and soundness and solvency; the FCA focuses on conduct, market integrity and consumer protection. Understand the Senior Managers and Certification Regime, the Consumer Duty, and the Treating Customers Fairly outcomes.
Conduct rules and market behaviour
Key themes: product governance (PROD), financial promotions that must be fair, clear and not misleading, complaints handling with defined timescales, and claims handling as a regulated activity. Know the Insurance Distribution Directive requirements on disclosure, demands-and-needs, and conflicts of interest.
Traps in questions
- Mixing up PRA and FCA responsibilities - solvency is PRA, conduct is FCA.
- Assuming the Consumer Duty applies only to retail customers; it covers retail and small business customers.
- Forgetting that product approval and fair value assessments are ongoing obligations, not one-off events.
Worked rule of thumb
When a question asks 'who regulates this?', split the activity: capital, reserving and solvency → PRA; sales, disclosure, complaints, claims and culture → FCA. If a single firm is both, the activity determines the regulator, not the firm.