In July 2022, we will take on responsibility for regulating the pre-paid funeral plans sector. This page is for funeral plan providers and intermediaries (those who sell funeral plans), explaining what our regulation means and how to get ready.
On this page:
- Our aim for regulation
- Who will be regulated
- What you need to do
- Firms that are already FCA regulated
- Senior Managers and Certification Regime
We aim to achieve good outcomes for consumers in this sector. 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.
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 in July 2022, you will need to apply for our authorisation or become an appointed representative (AR).
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.
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1. Now: Read our Consultation Paper
We’ll be making rules that you will need to comply with if you want to continue to operate in this sector.
We set out our proposed rules, how to apply for authorisation and what we expect from firms, in our Consultation Paper CP21/4, which closed on 13 April 2021.
We’re considering all the feedback we received and will publish our final rules in 2021 Q3.
Start thinking about FCA regulation
It’s important that you start considering whether you need to become FCA regulated and, if you do, how you can prepare.
If you decide to apply, you should start planning to make an application as soon as possible. The draft application form in our Consultation Paper is a good starting point to help you understand what information you will need to provide in your application.
The Consultation Paper also provides useful information on our proposals for regulating funeral plan firms and our expectations of firms operating in the sector. Applications should demonstrate how firms will meet these expectations.
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.
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).
You should be ready to submit your application as soon as the gateway opens. It is important that you submit your application and supporting documentation as soon as possible after the application gateway opens. This is to make sure that you give yourself as much time as possible to demonstrate to us that you meet our Threshold Conditions (our minimum standards to become authorised) before our regulation starts in July 2022.
We will assess applications on a case-by-case basis. Your application should answer all the questions as accurately and completely as possible and should be accompanied by all the required supporting documents. This will help us to process your application as quickly as possible.
If we need to, once you have submitted your application, we will ask for more information from you to decide if you meet the standards to be authorised. If you can’t demonstrate that you meet the Threshold Conditions, you will be refused authorisation.
If you are not authorised by 29 July 2022, you will have to stop selling and administering funeral plans until your application for authorisation is approved (you can find more information in section 3 of the Consultation Paper).
Important: We’re proposing that the application fee will increase by 40% for applications made after 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 another regulated provider.
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.
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.
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 propose to apply the SM&CR to funeral plan providers and intermediaries, read Chapter 8 of our Consultation Paper.
Read more on our authorisation and supervision processes (please note, this isn’t specific to the funeral plans sector):
- Authorisation: what’s involved
- Our authorisation process
- How we supervise firms
- Fees charged by the FCA
|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||Q3 2021||After considering your feedback, we will publish a Policy Statement with a package of rules.|
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. We’re proposing that the application fee will increase by 40% for applications made after 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.