FCA statement on EU withdrawal following the March European Council
The FCA has welcomed the agreement reached on the terms of an implementation period that will apply following the UK’s withdrawal from the European Union. The implementation period is intended to operate from 29 March 2019 until the end of December 2020, during which time European Union law would remain applicable in the United Kingdom, in accordance with the withdrawal agreement. Firms and funds would continue to benefit from passporting between the UK and EEA during the implementation period. Obligations derived from EU law would continue to apply and firms must continue with implementation plans for EU legislation that is still to come into effect before the end of December 2020. Consumer rights and protections derived from EU law would also continue to apply.
FCA and ICO publish joint update on GDPR
In a joint statement with the ICO, the FCA has said it believes the GDPR does not impose requirements which are incompatible with the rules in the FCA Handbook. Indeed, there are a number of requirements that are common to the GDPR and the financial regulatory regime detailed in the Handbook. The FCA statement says; “Compliance with GDPR is now a board level responsibility, and firms must be able to produce evidence to demonstrate the steps that they have taken to comply,” and goes on to say: “While the ICO will regulate the GDPR, complying with the GDPR requirements is also something the FCA will consider under their rules, for example, the requirements in the Senior Management Arrangements, Systems and Controls (SYSC) module. As part of their obligations under SYSC, firms should establish, maintain and improve appropriate technology and cyber resilience systems and controls. The FCA and ICO will continue to collaborate in the coming months to address concerns firms raise and support firms’ preparations for the introduction of the GDPR in May 2018.”
Use of technology to achieve smarter regulatory reporting
The FCA has announced that it is seeking views on how technology can make it easier for firms to meet their regulatory reporting requirements and improve the quality of the information they provide. The FCA regularly explores how technology can make regulations more efficient and reduce the regulatory burden on firms.
Value measures pilot said to be having a positive impact
The FCA has published data on claims frequencies, claims acceptance rates and average claims pay-outs for four general insurance products (home, home emergency, personal accident and key cover) relating to 36 insurers, covering the year ended 31 August 2017. The publication of value measures data was one of the remedies from the FCA’s general insurance add-ons market study, which found poor value in both add-on, and some stand-alone, products.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: “Publishing value measures data increases the range of information available about general insurance products. This will help increase market focus on suitability and value, as well as the headline price. We have already seen examples of where publishing the first set of data has incentivised insurers to make product improvements and focus more on overall product value.”
Insurance Distribution Directive implementation delay – UK Government announcement
The European Commission has proposed to delay the application date of the Insurance Distribution Directive to 01 October 2018. This proposal is currently under consideration by the European Parliament and European Council. In order to provide certainty for industry, government will delay making the “The Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018” until the outcome of this proposal has been confirmed. This is expected to be after 23 February 2018, the original application date of the directive. When the Order comes into force, the Financial Conduct Authority (FCA) will be able to finalise their rules. Firms will then be required to comply with those rules from whatever date is ultimately agreed as the application date of the directive. Under the current proposal from the Commission this date would be 1 October 2018.