The FCA’s ongoing focus on fair value and Consumer Duty outcomes means that firms must remain vigilant about how they distribute protection insurance products. While the current (2025) review of protection products, including term assurance, critical illness cover, income protection, and whole of life insurance, is forward-looking and not aimed at past conduct, it serves as a timely reminder for firms to assess their own practices.
To ensure your firm is well-prepared, start by evaluating commission arrangements. The FCA has raised concerns that some models may lead to unfair outcomes, particularly where switching policies does not benefit the customer or where premiums are increased to cover higher commissions. Reviewing your approach to advising on switching policies can help demonstrate that your recommendations are driven by client needs rather than incentives.
Additionally, consider whether the customer journey truly supports good outcomes. Simplifying policy wording, improving communication, and ensuring that clients fully understand the importance of accurate declarations are key to aligning with the FCA’s expectations. Addressing these areas proactively can help mitigate risks and build client trust.
It’s also important to think about your panel arrangements. Are you offering a broad enough range of products, or are restricted panels potentially limiting value for your clients? Evaluating this aspect can help ensure that your clients receive the most suitable and competitively priced options.
By taking a proactive, customer-focused approach, your firm can stay aligned with the FCA’s goals of ensuring good outcomes, fair value, and transparent practices.
