Regulation of pre-paid funeral plan providers

Our regulation of the pre-paid funeral plans sector comes into force on 29 July 2022.

If you’re a provider of pre-paid funeral plans, there are 2 activities that we’ll regulate. These are:

• entering into new funeral plan contracts
• carrying out funeral plan contracts (this activity is for firms that will administer funeral plan contracts, including those entered into both before and after our regulation starts)

If you sell and administer new funeral plan contracts, you will need permissions for both entering into and carrying out funeral plan contracts. 

If you plan to stop selling new funeral plans, but you want to continue to administer existing plans, you will still need to apply for our authorisation to carry out funeral plan contracts.

If you don't intend to apply for authorisation, please contact us now to let us know.

Read our February 2022 statement for an update on our approach to provider applications.

Applying for authorisation

To do this, you will need to follow our authorisations process. 

This process will take time, so it’s important that you submit a comprehensive application early in the process to allow enough time for our assessment and enquiries. 

If you submit your application after January 2022, or omit relevant information or documents from your submission, you should not expect your application to be determined before our regulation starts on 29 July 2022.

From 1 November, providers that were already trading in the funeral plans market when the authorisations gateway opened on 1 September 2021, will pay an application fee of £14,000. 

New firms that began operating in the funeral plans market from 1 September 2021, will continue to pay the standard fee of £10,000.

Providers that aren't authorised by 29 July 2022

If you don’t intend to apply for authorisation, you should stop selling funeral plans when you decide that you will not be applying. If you apply, but your application is withdrawn or refused, you should stop selling funeral plans at that point.  In either case, you should transfer your existing books of business or wind down in an orderly way before our regulation starts.  

If your application is refused, you must stop selling new funeral plans at the point of refusal. It’s unacceptable, and may be unlawful, for plan providers to sell new plans they won’t be able to deliver once regulation starts.

Appointing intermediaries as appointed representatives (ARs)

As a funeral plan provider, you may want to appoint intermediaries to distribute and sell your plans as ARs. To find out more about how we are applying the AR regime to the pre-paid funeral plans sector, read Chapter 7 of our Policy Statement.

You may appoint ARs or introducer appointed representatives (IAR). The nature of the appointment will depend on what activities they are carrying out. 

If the intermediary is discussing or advising on which funeral plan the consumer should take out, or bringing about a particular contract, it will need to become an AR. If it's just handing out information (for example a leaflet) on your funeral plans, and doesn't discuss the funeral plan, it may be able to become an IAR.

You should now contact the firms you intend to appoint as ARs and keep in contact with them.

Important: As a principal, you will be responsible for the conduct and regulatory compliance of your ARs. It's important that you are familiar with your role and responsibilities as a principal before you apply to register ARs.

You will need to tell us, during your application for authorisation, whether you intend to appoint ARs, how many and their names. When we have received your application, we will engage with you about the ARs you intend to appoint and the timing for submission of your AR registrations.

Find out more about recruiting ARs and monitoring ARs.

Approved Persons Regime (APR) 

Senior managers at ARs will be subject to the APR.  

When you appoint an AR, it’s your responsibility as the principal firm to identify which individuals at the AR firm are performing an activity described as a ‘controlled function’ and to make sure that you are following the APR rules.

There are more details on the APR in our Handbook. 

Funeral plan providers list 

We have published information about the status of providers’ applications for authorisation, which we will update regularly.  

This includes whether you have applied, if you’ve withdrawn your application, if you’ve been refused authorisation, or if you’ve been approved for authorisation. This is to make sure that consumers are aware of your regulatory status.   

If you have any questions about this list, please email [email protected]. 

Prudential requirements 

Funeral plan providers must meet our prudential requirements. You can find out more about these in our Policy Statement and rules.

You should prepare your business now to make sure that you have the financial resources to meet the requirements for day 1 of regulation. You must demonstrate in your application how you will meet these requirements.

Where a plan provider company's statutory accounts are prepared on a consolidated basis with its trust accounts, for the purpose of our financial assessment, you must be able to provide a stripped-out version of the company accounts that outlines the company's standalone financial position.

Ongoing reporting requirements

Funeral plan providers will need to submit the following regulatory returns:

• quarterly conduct returns
• 6-monthly prudential returns
• an annual complaints return

Find out more in Chapter 7 of the Policy Statement.