On 12 November 2021, the FCA published a letter addressed to Chief Executives regarding applications for authorisation to be a funeral plan provider. The Government has legislated to bring pre-paid funeral plan markets into the scope of FCA statutory regulation from 29 July 2022, at this point all funeral plan providers and intermediaries must have appropriate authorisation to continue funeral plan activities.
After this date it will be a criminal offence to continue this regulated activity without appropriate authorisation.
Funeral plan providers that do not intend to apply for authorisation should contact firstname.lastname@example.org with a clear plan to wind down their existing pre-paid funeral plan business before 29 July 2022. This also applies to firms that decide to withdraw their application after submitting it.
The authorisations gateway has been open since 1 September 2021, applications submitted after January 2022 should not be expected to be determined before 29 July 2022 and those providers waiting to hear must cease all pre-paid funeral plan business until they are authorised.
Firms who are refused authorisation will be expected to stop the sale and administration of their plans and provide the FCA with a clear wind down plan for all existing contracts before 29 July 2022. A consumer warning may be published to inform consumers that authorisation has been refused.
At all stages firms should communicate fairly and transparently with existing customers. The FCA states that at “all stages in the process, in any scenario, you should communicate fairly and transparently with your existing customers. If you know your firm will not obtain authorisation you should inform your customers of your intentions regarding their funeral plans in line with your contractual obligations, explaining clearly what will happen. As soon as you know your firm will not obtain authorisation, you must stop selling new plans to customers.”
The FCA will be keeping an updated record of all plan providers and their application status on their website for consumers.