In a blog post, the Financial Conduct Authority published guidance for firms on managing conflicts of interest in vertically integrated insurance business models. The FCA said conflicts can arise when a group operates across multiple parts of the insurance chain, including underwriting, distribution and premium finance, or where firms are linked through ownership or financing arrangements. Firms must identify, manage and evidence those conflicts, and the FCA stressed that disclosure to customers on its own does not meet that obligation. The FCA said firms should have effective governance, clear senior management accountability and controls that work in practice. It highlighted product and panel design, customer communications, remuneration structures and transparency around commercial relationships as key areas to assess, and said firms should be able to evidence the value added at each stage of the chain. The regulator has written to some firms where it believes business models may pose heightened conflict risks, will monitor the area and may issue ad hoc data requests. It also expects prompt notification of material business model changes affecting conflicts, and said firms with overly complex or hard-to-supervise structures should consider simplifying them, with supervisory engagement and enforcement available where consumer harm or weak accountability is identified.
Financial Conduct Authority2026-07-23
Financial Conduct Authority outlines expectations on conflicts in vertically integrated insurance, warns on supervision and enforcement
The Financial Conduct Authority has outlined its expectations for managing conflicts of interest in vertically integrated insurance models. It said firms must actively identify, manage and evidence conflicts, and that disclosure alone is not enough. The FCA has already contacted some firms, may request data, and warned it can escalate from supervision to enforcement where business models risk consumer harm.