The FCA has confirmed changes to simplify its rules and lower costs for insurers, while saying it is maintaining appropriate levels of protection for smaller commercial customers.

The regulator said its final rules aim to give more flexibility and responsibility to insurance firms.

Insurers will be able to determine for themselves the frequency of their product reviews and how much continual professional development (CPD) staff should undertake.

The FCA said it will make further changes to its insurance rules and cut unnecessary requirements next year, including reviewing the international application of its rules and the Consumer Duty.

Separately, the regulator has also published proposals to benefit insurers and other firms, including a raft of technical changes to streamline its rules and reduce complexity following the introduction of the Consumer Duty.

The changes include proposals to:

• remove three further insurance data returns
• review eligibility and disclosure rules for packaged bank accounts (PBA)
• streamline and simplify rules on collective investment client assets
• remove Handbook references no longer needed now the Consumer Duty is in force.

The FCA has also set out wider plans to better support smaller financial firms by creating sector guides to help them apply outcomes-based regulation, starting with consumer credit firms next year. The pilot will inform the FCA’s longer-term approach to supporting smaller firms.

Graeme Reynolds, director of competition and interim director of insurance at the FCA, said: “We’re simplifying and removing rules for insurers and brokers, reducing regulatory costs and helping them focus on delivering better outcomes.

“Our focus on smarter regulation is not once and done, and by using the Consumer Duty we’ll continue to look at rules we may no longer need. We want firms to keep engaging with us on further simplifications for the insurance sector, so we can support growth and innovation.”

Cormac Bradley, senior actuarial director at consultancy Broadstone, said: “Today’s FCA policy statement is a targeted, proportionate tidy up of UK insurance conduct rules, not a wholesale rewrite. It trims requirements that had become overlapping with Consumer Duty or overly prescriptive, while keeping protections intact.

“Three areas will be felt most on the front line: a clearer boundary for larger commercial customers vs SMEs, more flexible competency/CPD frameworks (with accountability squarely on firms) and a streamlined approach to Employers’ Liability register reporting. At the same time, the FCA has parked wider changes, notably GAP and non-UK business scope, for further consultation in 2026. Watch this space."