May 1, 2024

UK Insurance Horizon Scanner - May and June 2024

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A snapshot of key market and regulatory developments expected to impact the UK insurance sector over the next few months.

Coming up in May and June.

MONTH	DATE	DETAILS
MAY	31	ESG: all authorised firms need to comply with the FCA anti-greenwashing rule which applies to all communications about financial products or services that refer to the environmental or sustainable characteristics of those products/services.
JUNE	During June	Solvency II (UK): PRA to publish final policy on matching adjustment reforms (set out in CP19/23).
	19	Climate change: Deadline for responses to the IAIS third consultation on climate risk supervisory guidance.
	End of June 2024	Solvency II (UK): reforms to the matching adjustment expected to come into force.

Additional developments on the horizon in 2024.

MONTH	DATE	DETAILS
2024	Early 2024	Cryptoassets: HMT to introduce "cryptoassets: phase 1" secondary legislation to bring activities relating to fiat-backed stablecoins into the regulatory perimeter, subject to available parliamentary time.
	2024	Review of discount rate for PI damage awards: Next review due of discount rate due to begin by 1 July 2024
	2024	Insurance intermediaries: In May 2022 the FCA wrote portfolio letters to P&CLII and LLMI on key risks and notes that they will write again in 2024 to provide their updated view of the key risks firms in this portfolio pose, the extent to which these risks are being mitigated and their updated supervisory plans.
	2024	Bank of England system-wide exploratory scenario exercise (SWES): publication of the final report by the B of E, reporting on results of this exercise (launched in June 2023) to examine the behaviours of banks and non-bank financial institutions during stressed financial market conditions and identify vulnerabilities in the financial system. Due 2024.
	2024	PRIIPS: The FCA will publish a consultation paper on its proposed rules.
	2024	Mutual insurers: Terms of reference and timeframes relating to Cooperatives, Mutuals and Friendly Societies Act are expected to get underway in early 2024.
	2024	Senior Managers and Certification Regime: Consultation paper due in 2024.
	2024	Vulnerable customers: The FCA intends to conduct a post-implementation review of FG21/1 in 2024 to test the effectiveness of firm's implementation and look at how this has impacted on outcomes for customers in vulnerable circumstances. It aims to publish a final report by end of 2024.
	2024	ESG: FCA expected to consult on new rules for climate transition plans.
	2024	Cryptoassets: HMT to introduce "cryptoassets: phase 2" secondary legislation to bring the financial services regulation of cryptoassets within the FSMA regulatory framework, subject to parliamentary time.
	2024	Multi-occupancy buildings: Legislation – Leasehold and Freehold Reform Bill – expected to be enacted which will ban managing agents, landlords and freeholders from taking commissions and other payments when they take out buildings insurance but replacing these with more transparent fees.
	2024	Climate change: IAIS intends to launch the fourth and final consultation climate risk supervisory guidance, which will cover issues including supervisory reporting and public disclosures, later in 2024
	2024	Insurance Special Purpose Regime: The PRA intends to review the Regime and consult on proposals to improve and increase its usage.
	H1 2024	Insurance stress test: For life insurers the PRA aims to publish more details about their approach to the next exercise in the first half of 2024 and invite further technical input on the mechanics of the exercise, including on disclosure.
	H1 2024	Funded reinsurance: New supervisory statement to come into force.
	H1 2024	Insurance captives: The government expected to consult on the design of an new framework for insurance captives in the UK.
	H1 2024	Post Brexit: UK and Switzerland expected to ratify Berne Financial Services Agreement
	H1 2024	General insurance pricing practices: FCA expects to collect data relating to evaluation of general insurance pricing practices.
	Q2 2024	Insurance branches: Final rules and policy statement due and implementation of the PRA’s proposals on authorisation and supervision of insurance branches.
	Summer 2024	Change of control: new PRA supervisory statement and FCA guidance on the prudential assessment of change on acquisitions and increases in control come into force.

Dates are subject to change but the dates included in this table are correct as at the date of publication on the basis of information available to the authors.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.