The Financial Conduct Authority's new non-financial misconduct rules came into force on September 1, 2026, extending the regulator's Conduct Rules to cover serious workplace bullying, harassment and violence across roughly 37,000 additional regulated firms, including insurers, brokers, wealth managers and the Lloyd's market.
The new rule, COCON 1.1.7FR, brings non-financial misconduct explicitly within scope of the FCA's Conduct Rules for the first time in non-banking firms, aligning them with a standard that has applied to banks for several years. The FCA has deliberately avoided a closed list of what counts as misconduct, describing it broadly as behaviour "not of a clearly financial nature," with bullying, harassment, sexual misconduct and violence named explicitly, provided the conduct is sufficiently serious and has a genuine work-related link. The threshold for seriousness is aligned with the definition of harassment under the Equality Act 2010. From today, firms must also disclose verified misconduct incidents through regulatory references when staff move between employers.
Jacqueline Girow (pictured), executive director at the London & International Insurance Brokers' Association (LIIBA), said LIIBA ran a series of six workshops over the past year for its members as a collective with the Lloyd's Market Association and International Underwriting Association, including a separate session built specifically for C-suite and non-executive directors. She said the sessions were created with Padda Consulting, which polled attendees under Chatham House rules so people could speak openly, and were built around hypothetical case studies so firms could test their thinking against situations they might actually face.
The programme, the first joint training initiative ever shared across brokers and underwriters in the London market, followed a direct request from the FCA after its 2024 report into non-financial misconduct in the wholesale specialty insurance market. Girow has previously said the workshops revealed that cultures tend to erode not through dramatic scandals but through small, unchecked challenges, and that most firms don't lack policies so much as they lack staff trust that those policies will actually protect people.
Girow said the questions that came back from workshop attendees were consistently practical, mostly boiling down to two things: have we understood this correctly, and how do we compare to our peers. She said what counts as a reasonable step for a firm of 20 people is different from what it means for a multinational, and that members specifically wanted to know what a regulator would expect to see from a firm their size.
That concern reflects LIIBA's own membership profile, where roughly 80% of member firms employ fewer than 50 staff, a proportion Girow's predecessor as chief executive previously flagged as a reason smaller intermediaries would need targeted support given their shallower HR resources compared with larger wholesale banks and insurers.
Girow said her concern for smaller members is that they will assume good culture is something only large compliance budgets can measure and deliver. She said a broker with 30 staff must be able to demonstrate to a regulator what happens when somebody raises a concern and how effectively it is handled, since that is what the regulator is actually looking for. The firms that will find September uncomfortable, she said, are the ones where nobody can give a straight answer about how their culture is viewed by employees and how a complaint is managed and dealt with.
That framing is consistent with the FCA's own stated shift in focus. Having described its policy work on non-financial misconduct as now complete following its December 2025 final guidance, the regulator has said its attention is moving to whether firms are actually tackling misconduct in practice, rather than simply whether the right policies exist on paper, a distinction Girow's comments echo directly when she describes the difference between having a policy and being able to demonstrate it works.
The rules land alongside other overlapping reforms that add further pressure on firms to get this right. The Employment Rights Act 2025 removes the cap on unfair dismissal compensation from January 2027, which the Chartered Insurance Institute has separately warned could have direct implications for reinsurers, since excess limits under existing reinsurance treaties could be breached in ways underwriters had not anticipated when those treaties were originally written.
For brokers specifically, LIIBA's central message, that regulators are less interested in whether a policy document exists than in whether a firm can demonstrate its complaints process actually functions, sets a practical bar smaller firms can meet without matching the compliance budgets of far larger organisations, provided they can speak to what happens after someone raises a concern.
