What Is FCA Consumer Duty for Insurance Brokers?

The Financial Conduct Authority's Consumer Duty became law on 31 July 2023. By the time you read this in 2026, it has been in force for nearly three years — and the FCA's supervisory and enforcement activity under the Duty is accelerating, not settling. Firms that treated the July 2023 deadline as a finish line rather than a starting gun are now discovering that the regulator expects ongoing, evidenced compliance, not a one-time implementation exercise.

For UK insurance brokers, Consumer Duty represents a genuine step change in what "compliance" means. It is not a repackaging of Treating Customers Fairly. It is a different kind of regulatory obligation — one that requires brokers to demonstrate that their retail customers are actually receiving good outcomes, and to produce structured, contemporaneous evidence that they are doing so. The gap between documented process and evidenced outcome is where many brokers are currently exposed.

This guide explains what Consumer Duty requires, how it differs from TCF, what the four outcome requirements mean specifically for insurance brokers, what evidence you need to produce, and what happens when you cannot. It is written for compliance leads, SMF holders, and operational managers who need a clear, current understanding of where the regulatory bar sits and how to meet it.

What Is FCA Consumer Duty?

Consumer Duty is a regulatory framework set out in FCA Policy Statement PS22/9, with the rules codified in PRIN 2A of the FCA Handbook. At its core, it establishes a single Consumer Principle: firms must act to deliver good outcomes for retail customers. This principle is supported by three cross-cutting rules and four concrete outcome areas.

The three cross-cutting rules require firms to: act in good faith toward retail customers; avoid causing foreseeable harm to retail customers; and enable and support retail customers to pursue their financial interests. These rules apply across everything a firm does — they are not confined to specific products or processes.

The four outcome areas — products and services, price and value, consumer understanding, and consumer support — provide the specific framework against which broker conduct is assessed. Each outcome area has its own set of expectations that translate into concrete operational obligations.

Consumer Duty applies to firms in the distribution chain for retail products and services. For insurance brokers, this means it applies whenever you distribute insurance products to personal lines customers or to small businesses qualifying as retail clients. Whether you are directly authorised, an appointed representative, or operating within a network, you have Consumer Duty obligations that cover the elements of the distribution chain for which you are responsible.

For a concise reference on key Consumer Duty terms and how they apply in an insurance context, see the Regure Consumer Duty glossary entry. For a broader view of insurance compliance obligations across markets and jurisdictions, visit the Global Compliance Hub.

How Consumer Duty Differs from Treating Customers Fairly

If you have operated under Treating Customers Fairly since 2006, the natural instinct is to frame Consumer Duty as "TCF with more detail." That framing is fundamentally wrong, and it will lead you to underinvest in the areas where Consumer Duty creates genuinely new obligations.

TCF was a principles-based, process-focused regime. The regulator wanted to see that firms had the right policies, the right governance structures, and the right training programs. The question TCF asked was: "Are your processes designed to treat customers fairly?" If you could demonstrate sound processes — a documented complaints procedure, a product governance policy, clear disclosure documents — you were generally in acceptable regulatory territory.

Consumer Duty is an outcomes-focused regime. The question it asks is: "Are your customers actually receiving good outcomes?" Process is necessary but not sufficient. A broker with impeccable documented procedures who nonetheless sells unsuitable products to the wrong customers, charges unfair prices, or leaves claimants without adequate support has not complied with Consumer Duty, regardless of how good the paperwork looks. The regulator wants evidence of outcomes, not just evidence of process.

Under TCF, a well-documented process was compliance. Under Consumer Duty, a well-documented process that produces poor customer outcomes is still non-compliance. The shift from process to outcome evidence changes what your systems need to capture and what your board needs to attest to.

Consumer Duty also places the board at the centre of compliance in a way that TCF did not. The annual Consumer Duty board report — a document that the board must review and attest to — requires the firm to assess whether it has achieved good outcomes across all four outcome areas. A board report that cannot be supported by underlying data is not compliant. This creates a direct line from operational evidence capture to board-level accountability that TCF did not establish.

Additionally, Consumer Duty places explicit obligations on firms higher in the distribution chain to share information with firms lower in it. As a broker, if you identify that a product manufacturer's product is causing poor outcomes for your clients, you have an obligation to communicate that upstream. And manufacturers have obligations to share the information you need to conduct your own product governance. TCF had no equivalent mechanism.

The Four Consumer Duty Outcomes: Broker-Specific Obligations

Outcome 1: Products and Services

Brokers must ensure that the products they distribute are designed to meet the needs of a defined target market, and that they are actually selling those products to customers within that target market. This is a product governance obligation that sits independently of the manufacturer's own product governance work.

In practice, this requires brokers to document their target market assessment for each product they distribute, specifying the customer characteristics, needs, and objectives that the product is appropriate for. It requires ongoing monitoring to check that your actual customer base matches the intended target market — if you find significant concentrations of customers outside the defined target market, this is a signal that something is wrong with either the product design or your distribution approach. And it requires you to feed relevant information back to product manufacturers when you identify issues.

For brokers who have historically relied entirely on insurer product approval materials without conducting independent distributor-level product governance, this represents a genuine new obligation. The manufacturer's target market assessment informs yours; it does not replace it.

Outcome 2: Price and Value

Brokers must be able to demonstrate that the price customers pay is fair relative to the benefit they receive. For brokers, this means your remuneration — commissions, fees, ancillary charges — must be justifiable as proportionate to the value you deliver.

The FCA has not said that high commission levels are inherently unfair. It has said that they require justification. A broker who provides substantial value — expert advice, proactive risk management support, dedicated claims handling assistance — can justify higher remuneration than one providing a transactional placement service. But the justification must be documented. An undocumented assumption that your remuneration is fair is not a fair value assessment.

Fair value assessments should be conducted for each product type or remuneration arrangement, reviewed at least annually (and whenever material changes occur), and retained as evidence. They should address: what benefits you provide to customers; the nature and quality of your service; any disbenefits of the products you distribute (significant exclusions, complex policy conditions); how your pricing compares to the market; and your conclusion on whether the overall package represents fair value.

Outcome 3: Consumer Understanding

Firms must ensure that their communications enable retail customers to make informed decisions. The test is not whether communications comply with existing disclosure requirements — it is whether customers actually understand what they have bought, what is not covered, and what they need to do if something goes wrong.

For brokers, this creates obligations that go beyond producing technically accurate disclosure documents. You must review your communications for genuine comprehension, not just legal accuracy. You must monitor for evidence that customers are misunderstanding what they have bought — a surge in claims declined because of an exclusion that was "disclosed" in a document no customer actually read is precisely the kind of outcome signal Consumer Duty expects you to act on. And you must be able to evidence that your communications have been designed and tested with customer comprehension in mind.

Renewal communications have received particular FCA attention. Under the new consumer understanding requirements, renewal documents must genuinely inform customers about whether their current product remains suitable, not just comply with the technical requirements for renewal disclosure.

Outcome 4: Consumer Support

Firms must ensure that customers can access the help and support they need, when they need it, through channels that work for them. This covers both operational accessibility — can customers actually reach you with a problem? — and specific obligations around vulnerable customers.

The FCA's vulnerability guidance, which underpins the consumer support outcome, requires brokers to have processes for identifying customers who may have characteristics of vulnerability: health conditions, life events (bereavement, relationship breakdown), financial distress, or limited digital resilience. Once identified, these customers must receive adapted support. A documented vulnerable customer policy is necessary but not sufficient — you need evidence that the policy is being applied in practice.

For brokers who assist clients through claims, the consumer support outcome has direct operational implications. Your claims assistance service must be accessible, timely, and genuinely helpful. The audit trail capabilities that record every step of the claims assistance you provide are directly relevant to demonstrating compliance with this outcome.

What Brokers Must Evidence: The Data Requirements

Consumer Duty is not self-certifying. The FCA expects firms to be able to produce data that demonstrates good outcomes have been achieved. For brokers, this evidence requirement is the most operationally demanding aspect of the Duty.

The evidence categories that most brokers need to demonstrate include:

• Customer outcome data: complaint rates and root cause analysis, claims acceptance rates and reasons for denial, customer satisfaction data, and product renewal rates as a proxy for ongoing suitability
• Fair value assessment documents: one per product type or remuneration arrangement, reviewed annually, with an explicit value conclusion supported by evidence
• Target market assessments and distribution strategy documents: showing that the products you distribute are appropriate for the customers you serve
• Communication records: what was sent to each customer, when, and through what channel — covering point of sale, mid-term changes, renewals, and claims notifications
• Vulnerable customer records: evidence that identification processes are being applied in practice and that adaptations are being made where vulnerability is identified
• Product governance monitoring records: showing ongoing assessment of whether distributed products continue to meet target market needs and represent fair value
• Annual board report: a document reviewed and attested to by the board, based on underlying evidence, assessing Consumer Duty compliance across all four outcomes

The communication records category deserves particular emphasis because it is where many brokers discover they have a systems problem. Knowing what you sent to a customer, in what form, and when, requires your operational systems to capture and retain that information in a structured, retrievable way. Email archives and shared drives are not adequate for this purpose — they are unstructured, difficult to search systematically, and do not create the kind of contemporaneous, policy-linked record that Consumer Duty evidence requires.

For UK brokers working to build the operational infrastructure for Consumer Duty evidence, the Regure UK compliance page explains how the platform's audit trail and document management capabilities map to these specific evidence requirements.

Penalties for Non-Compliance

The FCA's enforcement toolkit under Consumer Duty is substantial. The regulator can impose unlimited financial penalties, require firms to remediate affected customers (which in insurance contexts can mean revisiting and settling declined claims), restrict or suspend regulated activities, and ultimately withdraw FCA authorisation. For insurance brokers, the loss of authorisation is an existential event.

The FCA has been clear that it will move progressively from supervisory engagement to formal enforcement where it finds material failures. The escalation pattern is: supervisory letter identifying concerns; requirement to produce a remediation plan; enforcement action if the remediation is inadequate or if the failures are serious. Firms that have taken a superficial approach to Consumer Duty — that have documentation without genuine operational change — are the firms most at risk from this escalation.

Beyond formal penalties, Consumer Duty enforcement action creates significant commercial exposure. Insurer panels review broker compliance records. Lloyd's coverholders are subject to managing agent oversight that includes Consumer Duty considerations. Enterprise clients increasingly require evidence of regulatory compliance as a condition of placing business. The reputational and commercial consequences of enforcement action extend well beyond the fine itself.

The Most Common Consumer Duty Failures in 2026

With nearly three years of regulatory history now available, the patterns of Consumer Duty failure are becoming clear. The FCA's supervisory work and independent compliance reviews consistently identify several recurring problems at UK insurance brokers:

• Treating Consumer Duty as a completed project rather than an ongoing compliance discipline — firms that implemented changes in 2023 but have not maintained active monitoring programs since are drifting out of compliance in ways they are not tracking
• Undocumented fair value assessments — the mental exercise of concluding that remuneration is fair, without producing the documented evidence the FCA expects, is not a fair value assessment in any meaningful sense
• Vulnerable customer processes that exist on paper but are not operational in practice — the gap between policy and practice is a common point of supervisory concern
• Inadequate board engagement — Consumer Duty places obligations at board level, and boards that have treated it as a compliance team matter without maintaining genuine oversight of the annual report and underlying evidence are exposed
• Evidence infrastructure gaps — many brokers cannot produce communication records, claims assistance logs, or customer outcome data not because they do not do the right things operationally, but because their systems do not capture and retain that evidence in a form that can be retrieved and presented

Building a Sustainable Consumer Duty Evidence Framework

The firms that are most confident in their Consumer Duty position share a common characteristic: they have built operational systems that generate evidence continuously as a by-product of normal operations, rather than scrambling to reconstruct evidence retrospectively when the regulator asks for it.

This means every customer communication is recorded against the relevant policy or claim record, with a timestamp and a user ID. Every step in the claims assistance process is logged. Every document sent or received is filed against the relevant customer and policy record. Every vulnerable customer identification and the adaptation made in response is documented at the time it occurs.

When this infrastructure is in place, the annual Consumer Duty board report becomes an exercise in analysis and presentation rather than a panicked search for evidence. The data exists. The question is what it shows about customer outcomes — and where it identifies improvement needs.

Regure's platform is built around this model of continuous evidence capture. The immutable audit trail that underpins every workflow in the platform is not a compliance add-on — it is a core architectural feature. Every action taken on every document, communication, or claim record is captured with timestamp, user identity, and context. For brokers who assist clients through claims, this means the full claims assistance trail is available for retrieval at any time, in the structured format that Consumer Duty evidence requirements demand.

If your brokerage is working to build a more robust Consumer Duty evidence framework — or if you are assessing your current position and need to understand what an adequate evidence infrastructure looks like in practice — book a Regure demo to see how the platform's audit trail and document management capabilities map directly to your Consumer Duty obligations. A focused demonstration will show you what evidence capture looks like in a live environment and how it supports your compliance team, your board, and your interactions with the FCA.