The Financial Conduct Authority (FCA) has kicked off its pure protection market study with the first of a series of papers - providing a snapshot of today’s market landscape. While the next report lands in November and will summarise key findings of the research, the first paper gives us strong signals about where change may head - and we’re ready to help you navigate it.
Our change impact analysis
Our role in this market is critical. Our data integration standards underpin the key processes that make pure protection distribution work - connecting life companies, technology providers, portals, underwriters, and advisers. These standards enable the sourcing, quoting, and ongoing management of protection policies through financial intermediaries.
When regulation changes, these connections must evolve to keep up. That’s why, as the UK financial services industry’s trusted authority on data integration standards, we’re sharing our candidate change analysis now - so you can stay ahead, respond with confidence, and turn regulatory complexity into a competitive advantage.
These are the areas we believe the FCA is most likely to target based on its initial paper - and they’re the changes that could reshape your processes, compliance obligations, and customer engagement strategies.
- Commission structure reform
Expect tighter rules on commissions, including possible caps, enhanced clawbacks, and stricter disclosure. The goal: eliminate incentives that lead to poor consumer outcomes. - Fair value assessment and pricing controls
Mandated value assessments and pricing reviews could hit some products. Firms may need robust data to prove compliance. - Enhanced disclosure and transparency
Stronger disclosure standards for commissions, product limitations, and switching implications are on the horizon. Transparency may no longer be optional - it could be a regulatory expectation. - Restrictions on restricted panels
The FCA may require panel diversification or mandatory disclosure of panel limitations to ensure consumer choice isn’t compromised. - Consumer engagement and vulnerable customer protections
Additional guidance to protect vulnerable consumers could mean new processes and reporting requirements for advisers and providers. - Review of clawback arrangements
Current clawback mechanisms may be redesigned to better align with Consumer Duty principles. - Innovation and competition measures
Expect encouragement for Insurtechs, digital advice, and simplified products - creating opportunities for those ready to innovate.
What happens next – and how it impacts you
The FCA’s next paper will set the tone for significant regulatory reform. These changes won’t just affect compliance - they’ll reshape how you design, distribute, and manage pure protection products. From commission structures to fair value assessments, disclosure requirements, and vulnerable customer protections, your processes will need to adapt quickly.
We’re already preparing for that. As soon as the FCA publishes its findings, we will monitor every outcome and work closely with the industry to update our data integration standards to reflect the new requirements. That means you’ll have the frameworks and tools you need to stay compliant without slowing down your business.
By aligning your processes with updated standards, you’ll not only meet FCA expectations - you’ll build trust, improve consumer outcomes, and stay ahead of the market.
Scott Machin, Proposition Manager:
If you’re in the pure protection market, change is coming - and it’s going to impact how you work. I wouldn’t be surprised to see a phased commission cap introduced over the next five years, similar to the Australian model. That means you’ll need to rethink remuneration strategies and ensure compliance from day one. Direct-to-Consumer comparison services may be asked to up their game – striving even harder to inform or educate customers about products and services. Greater transparency and engagement will be central to better outcomes. We’ll make sure you’re ready. By updating our data integration standards in line with these changes, we’ll give you the clarity and confidence you need to adapt quickly.
