PS25/21: Simplifying the insurance rules

Read PS25/21 (PDF)[3]

What we are changing

We have confirmed several measures to simplify regulations for firms across the insurance and funeral plans sectors:

• Determining which rules apply to commercial insurance.
• Allowing a lead firm to take responsibility for product design and approval.
• Broadening the scope of, and clarifying, the bespoke contracts exclusion.
• Allowing firms to determine the frequency of product reviews.
• Removing notification and reporting requirements for employer’s liability insurance.
• Removing the minimum required 15 hours of CPD for employees.

Who this applies to

• Insurers and Lloyd’s managing agents
• Insurance intermediaries
• Firms that provide funeral plans

Who else will be interested in these publications:

• Industry groups and trade bodies
• Consumer groups and organisations

Alongside these rules we have announced further changes affecting insurance firms in 2026 to support growth and innovation.

Firms should read the following documents carefully and respond where needed.

Next steps - further plans to simplify insurance rules

We will continue working with stakeholders to make sure our rules strike the right balance between appropriate protections for consumers and supporting innovation and growth.

We have set out further action in the insurance sector as part of our wider plans to streamline rules and reduce complexity for firms[8], following the introduction of the Consumer Duty. This includes potential changes into 2026 and beyond:

• Consulting on disapplying the Consumer Duty to non-UK business by the end of Q2 2026. This includes reviewing feedback and further engagement to understand the risks and implications of disapplying ICOBS and PROD rules to non-UK business.
• Reviewing other core definitions to promote consistency and clarity. Feedback to CP25/12 (PDF[9]) shows that some areas of our rules remain complex such as key terms used in our rules like 'customer' and 'policyholder'.
• Reviewing in Q1 2026, the data firms submit and considering whether further changes may be consulted on during 2026. We recognise that supplying data is a significant task for firms, so we focus on balancing our need for information with the burden placed on the industry. In the insurance market, our initial focus has been to review our general insurance pricing returns. In the summer we removed our REP022 (attestation) return, and we consulted on removing further reporting in CP25/35[8].
• Reviewing information on disclosure requirements.

Background

The UK is a world leader and a global hub for commercial insurance, providing expertise in underwriting complex and specialty risks, and handling risks from all over the world. We want to support growth and innovation in the UK insurance market by streamlining our rules and requirements.

In our January 2025 letter (PDF)[10] to the Prime Minister we committed to reducing the conduct rules applicable to wholesale insurance.

We followed this with Feedback Statement FS25/2[11] in March 2025, which confirmed we would bring forward proposals removing unnecessary or duplicative regulation in the insurance sector.

In CP25/12 (PDF)[10] we consulted on proposals taking into account feedback received to Discussion Paper DP24/1[12] published in July 2024.