Regulating the funeral plans sector

On 29 July 2022, we will start regulating the pre-paid funeral plans sector. If you’re a funeral plan provider or intermediary (someone who sells funeral plans), find out what our regulation means and how to get ready. 

On this page:

Our aim for regulation

We aim to achieve good outcomes for consumers. We want to make sure that the products offered by firms:

  • meet consumer needs
  • offer fair value

We also want to make sure that firms look after consumers' money and use it to deliver funeral services.  

Who will be regulated

Our regulation will extend to:

  • providers: firms that enter into funeral plan contracts with consumers and/or which carry out funeral plan contracts that have previously been agreed (including those sold before FCA regulation)
  • intermediaries: firms that advise customers on funeral plan contracts or arrange them for customers (this may include funeral directors and will writers)

If you undertake any of these activities, and wish to continue doing so once our regulation comes into force on 29 July 2022, you will need to apply for our authorisation or become an appointed representative (AR).

There will be differences in our rules for providers and intermediaries.

By the time we begin regulating the sector, you must have made appropriate and timely arrangements either to lawfully carry out these activities – for example, by becoming authorised – or to have stopped doing FCA-regulated business. 

Continuing with regulated activity without being an authorised or exempt person (such as an appointed representative) is a criminal offence. 

Sign up for email updates

If you think our regulation will apply to you, it’s important to make sure you keep up to date and stay informed. To help, you can sign up to receive email updates.

What you need to do

1. Now: Read our Policy Statement and Consultation Paper on our further proposals 

We’ve made rules that you will need to comply with if you want to continue to operate in this sector.

We set out our rules, how to apply for authorisation and what we expect from firms, in our Policy Statement.  

We’re also consulting on further proposals including:  

  • resolution of firms 
  • FSCS protection 
  • structural provisions 

Please respond to the consultation by 31 August 2021. 

Prepare for FCA regulation  

It’s important that you are now preparing for FCA regulation.  

If you decide to apply, you should start planning to make an application as soon as possible. The draft application form is a good starting point to help you understand what information you will need to provide in your application.

You will be able to see the application form on our online application system, Connect, from 2 August 2021. You will need a Connect account to start drafting your application. Think carefully about selecting the person whose name the account will be created in, as this can’t be changed. Find out more about registering for Connect.

Read our Policy Statement to understand how we will regulate funeral plan firms and our expectations of firms operating in the sector. Applications should demonstrate how firms will meet these expectations. 

Our rules will all be set out in our Handbook. You can now see how the rules will appear in our Handbook from 29 July 2022. 

Early preparation is important as it often takes time for firms that are new to statutory regulation to understand and adapt to the new requirements. You will need to be able to demonstrate that your firm meets our standards for approval. 

If you do not want to apply for authorisation, please contact us to confirm your plans by emailing [email protected]

2. September 2021: Apply for authorisation

We plan to open the application gateway in September 2021. This is when you can submit your application for authorisation or variation of permission (if you are already FCA authorised for other activities).

Find out more about applying for authorisation.

Important: the application fee will increase by 40% for applications made after 1 November 2021. 

3. 29 July 2022: FCA regulation comes into force

By 29 July 2022, all funeral plan providers must be authorised by us to continue undertaking funeral plan activities.

If you’re not authorised by this date, you must have taken steps to either wind down your operations and/or transfer your back book of existing plans to a provider that is applying for authorisation. Carrying out a funeral plan contract, including a pre-existing contract, will be a regulated activity after 29 July 2022, and you must have the appropriate authorisation.

Intermediaries must either become directly authorised or become an appointed representative to continue selling funeral plans. Find out more about regulation for providers and intermediaries.

Firms that are already FCA regulated 

If you’re already regulated by us and wish to conduct activities in relation to pre-paid funeral plans, you will need to submit a variation of permission application.

You may need to add one or more new regulated activities to your permission, or add the investment type ‘funeral plan contract’ to the scope of your existing permission.

Find out more about applying for variation of permission and the fee you will need to pay.

Senior Managers and Certification Regime (SM&CR)

The SM&CR will apply to all directly authorised funeral plan firms. The regime is a set of rules and guidance that sets standards relating to professionalism, conduct and governance, and holds senior members of a firm to account. 

You must follow the requirements of the SM&CR, however, it doesn’t require specific qualifications for individuals working at funeral plan firms. 

To find out how we will apply the SM&CR to funeral plan providers and intermediaries, read Chapter 7 of our Policy Statementand further detail in Chapter 8 of CP21/4.

More information

Read more on our authorisation and supervision processes (please note, this isn’t specific to the funeral plans sector):

Timeline

Stage

Date Details
Legislation January 2021 The Treasury made legislation bringing the regulation of pre-paid funeral plans into our remit.
Consultation Paper 2 March 2021 We published a Consultation Paper to seek feedback from our stakeholders on our proposed rules. The consultation closed on 13 April 2021.
FCA fees consultation April 2021 We published a consultation paper on our fees proposals for funeral plan firms in our annual consultation paper on FCA fee-rates.
Policy Statement and Consultation Paper on further proposals July 2021 We published our Policy Statement with a package of rules. We also published a Consultation Paper on further proposals.
Draft application form available on Connect August 2021 You will be able to access the application form on our system Connect.
Authorisation  September 2021

We will open the authorisations gateway for firms. Firms will need to submit an application for authorisation or variation of permissions. You should be ready to submit your application as soon as the gateway opens. The application fee will increase by 40% for applications made after 1 November 2021.

Regulation in force 29 July 2022 All firms that want to continue operating as providers or intermediaries for the pre-paid funeral plans will need to be authorised or exempt (for example an Appointed Representative) by this time.

Consumer contracts and advertising

All firms need to make sure that their contracts with consumers are fair and their advertising is legal, decent, honest and truthful. This applies to all firms and is not linked to our regulation.

It's your responsibility to make sure that:

  • your terms are written clearly and are not unfair under the Consumer Rights Act 2015 and the Unfair Terms in Consumer Contracts Regulations 1999 
  • you follow the Committee of Advertising Practice’s Advertising Codes, which are administered by the Advertising Standards Authority
  • you don’t engage in commercial practices that may be regarded as unfair under the Consumer Protection from Unfair Trading Regulations 2008

Find out more about unfair contract terms and what you need to consider.

Page updates

29/07/2021: Information added Date clarified '1 November'.
23/07/2021: Information added Registering for Connect.
13/07/2021: Editorial amendment
07/07/2021: Information added Webinar: funeral plan intermediaries
05/07/2021: Information changed Information on PS21/8
05/05/2021: Editorial amendment Information for providers and intermediaries moved to new pages.
14/04/2021: Information changed Consultation Paper closed.
29/03/2021: Editorial amendment Change to webinar links.
16/03/2021: Information added Section on consumer contracts and advertising.
02/03/2021: Information added Details about the Consultation Paper.