The Financial Conduct Authority (FCA) has published its business plan for 2015/16. The business plan sets out the conduct regulator’s priorities for the year ahead and identifies emerging risks. Among the specific areas of FCA focus for the insurance market will be the use of big data and access to technology and the role of Appointed Representatives (ARs). In December last year, the FCA changed its strategic approach in order to place greater emphasis on sector analysis in order to address emerging issues with greater prioritisation.
The FCA proposes to undertake a market study to investigate how insurance firms are using what is known as ‘big data’, including web analytics and behavioural tools. Included in the study will be firms’ increasing use of social media as data sources. The study will seek to identify any potential risks and benefits for consumers arising from the use of big data in order to assess whether it may impede access to products. The market study will begin in the third quarter of 2015 with results due in 2016.
In addition, the FCA has proposed a review of the role of ARs in the insurance distribution chain. In particular, how firms ensure that they have adequate controls and resources to oversee their ARs. This study will start in the second quarter of 2015, with results published by the end of the year.
Among the cross-sectoral areas that will be included in the FCA’s programme will be a review of firms’ resilience in terms of cyber risks and the visibility of IT risks at board level. The risks of mis-selling created by poor performance management in firms will also be subject to review.
In terms of retail investments, the FCA proposes to assess firms’ compliance with the January 2014 guidance on inducements and conflicts of interest relevant to life business.
The FCA business plan also promises the publication of the final client money rules for insurance intermediaries.
For further information: FCA Business Plan 2015/16, 24 March 2015