Insurance Regulation and Professional Standards
The statutory framework
The Financial Services and Markets Act 2000 creates the general prohibition: a firm must be authorised (or exempt) to carry on a regulated activity by way of business, and financial promotions must be issued or approved by an authorised person. Regulation is split: the PRA supervises the prudential soundness of insurers (safety and soundness, plus an insurance-specific objective of protecting policyholders), while the FCA handles conduct. The FCA's three operational objectives are consumer protection, market integrity and competition. Authorisation depends on the threshold conditions: location of offices, effective supervision, appropriate resources, suitability and business model.
Conduct rules and Consumer Duty
The Principles for Businesses (PRIN) are high-level and outcome-focused, supported by detailed rules such as ICOBS for insurance. ICOBS requires a demands and needs statement, clear product information, disclosure of the firm's status and cancellation rights. The Consumer Duty adds a consumer principle, cross-cutting rules (act in good faith, avoid foreseeable harm, enable customers to pursue their financial objectives) and four outcomes: products and services, price and value, consumer understanding, and consumer support. Firms must also operate the Senior Managers and Certification Regime and apply the conduct rules to staff.
Complaints, redress and ethics
Firms must resolve complaints promptly; if unresolved after eight weeks the customer may go to the Financial Ombudsman Service, which is free to consumers and can award compensation up to a limit set by the FCA. The Financial Services Compensation Scheme provides a last-resort safety net. Professionals must maintain competence through continuing professional development (the IDD requires 15 hours a year for insurance distributors) and comply with the CII/PFS Code of Ethics, managing conflicts of interest and disclosing remuneration.
Rule of thumb: capital and solvency questions point to the PRA; conduct, selling and complaints questions point to the FCA.