The FCA has set out plans to simplify parts of its insurance rulebook, handing insurers and MGAs new flexibility over how and when they review their products.
The headline change is the removal of the compulsory annual product review, replaced instead with a requirement for firms to determine their own review cycle based on the nature, scale, and complexity of each product.
On paper, it’s a welcome shift. The one-size-fits-all annual review has long been criticised as too rigid, forcing some firms through a costly box-ticking exercise even where products, customer needs, and market conditions haven’t materially changed. The FCA’s new approach recognises that risk varies – and that governance should vary with it.
But this is not deregulation. It’s a redistribution of responsibility.
Under the proposals, insurers will have to justify why a product is reviewed annually, biennially, or even less frequently. Those decisions must be grounded in evidence, not judgement alone.
That means:
- Clear understanding of emerging trends across claims, customer outcomes, complaints, and pricing.
- Quantifiable signals when a product’s risk profile has shifted.
- Transparent audit trails that demonstrate how decisions were made.
Firms that treat the rule change as an opportunity to reduce oversight may find the FCA asking difficult questions later. Those that treat it as an opportunity to strengthen risk-based governance with appropriate data and processes will be the ones who benefit.
Another significant proposal is a new ability for one lead firm to take responsibility for product governance in co-manufactured arrangements.
Again, this simplifies process – but only where all partners have access to consistent, credible data on performance, customer outcomes, and distribution quality.
If the lead firm is accountable but partners hold fragmented or incompatible data, this creates governance blind spots.
In contrast, firms with shared, comparable insights into underwriting results and customer impact will be able to collaborate more effectively and evidence compliance with much less friction.
How Insurance DataLab can help
The FCA is deliberately moving away from prescriptive rules and towards evidence-based decision-making. That puts a clear emphasis on capability: firms must have the data and insight to back their choices.
And that is exactly where Insurance DataLab strengthens the picture.
Our market intelligence platform provides credible, comparable, and digestible data on insurer performance across underwriting, solvency, complaints, claims and customer experience.
This gives firms the external lens they need to assess how market conditions are shifting – a key input when determining product review frequency – as well as how they are performing relative to peers and the wider market.
This is also important for co-manufactured products.
Where insurers and MGAs partner on products, consistent, independent performance data becomes essential. Insurance DataLab provides a shared factual foundation that supports the new lead-firm governance model, reducing ambiguity and strengthening collaboration.
The FCA’s proposals are a step in the right direction: fewer arbitrary rules, more room for firms to apply their expertise. But they also raise the bar for data-driven governance.
Insurers that invest in high-quality insight will be well placed to use this new flexibility to innovate, streamline processes, and improve customer outcomes. Those that don’t risk being caught short when the regulator asks: “How did you decide this?”
With Insurance DataLab, firms can answer that question with confidence. To see how, contact Dan King to request a demo.