The International Underwriting Association (IUA) has welcomed the Financial Conduct Authority's plan to remove non-UK customers from the scope of the Consumer Duty. It has warned, however, that insurers may still have to repeat fair value work already carried out by brokers and managing general agents.
The proposals were set out in Consultation Paper 26/23, published on June 29, 2026. They would apply the Duty only to retail market business where the customer is ordinarily resident in the UK, based on their residential address or place of establishment, subject to a small number of targeted exceptions. The consultation closed on September 18, and the FCA expects to publish final rules in the first quarter of 2027.
Alongside the scope change, the FCA has proposed:
The package follows a government commitment made after the 2025 Mansion House speech and reinforced through the Leeds Reforms, amid concerns that the Duty had become disproportionately burdensome for wholesale firms.
The IUA's main concern sits in the distribution chain. The association argues that the biggest benefit for insurers would have been the ability to rely on the work of others further down the chain. MGAs and brokers in particular are often best placed to carry out fair value assessments because they are closest to the end customer.
The FCA has proposed proportionality clarifications for the Duty itself, but there has been no equivalent change to insurance-specific product governance rules. Without that change, the IUA says it is unclear how much its members will benefit, and insurers may continue to duplicate assessments that brokers and MGAs have already completed. For intermediaries, that suggests fair value data requests from carriers will continue much as they do now.
Chris Jones, the IUA's chief executive, said the association would like to see further rationalisation of insurance product governance rules. Allocating accountability according to the activities each firm actually performs would, he argued, cut duplicated effort across the chain.
The IUA has also opposed a proposal to remove remuneration disclosure obligations. Jones said requiring all parties to disclose the payment they receive is the best way to ensure transparency for the end customer. He warned that reducing that transparency could disadvantage customers and encourage undisclosed commission or fee arrangements.
On the scope change itself, Jones described the proposals overall as a positive step forward, with the restriction of the Duty's international reach particularly welcome.
"If it is supported by a proportionate, and practical approach to implementation, it will boost UK insurers' competitiveness in our most important markets," he said.
The IUA has argued for several years that FCA rules should not apply to non-UK business. Under the proposals, its members would be able to apply local regulation in the markets where their products are distributed, rather than satisfying both FCA rules and local requirements. That would put London insurers on a level footing with overseas competitors.
With the scope change broadly welcomed, the IUA's response makes product governance, and how responsibility is shared between insurers, MGAs and brokers, the next front in the debate.
