On January 11th, the FCA published CP23/1 to consult on replacing the insurance aspects of its previous guidance for insurance and premium finance for customers in financial difficulty due to Covid-19, with insurance guidance that applies to all customers in financial difficulty. 


In November 2020 the FCA published finalised guidance for insurance firms to support customers in financial difficulty due to the pandemic. In recent years, of course, the FCA has seen only an increase in numbers of consumers in financial difficulty.

The FCA is now consulting on replacing the insurance aspects of the Covid guidance and extending the scope so that it applies to all insurance customers in financial difficulty.


The FCA is proposing to expand the scope of the insurance aspects of the Covid Guidance to cover all customers in financial difficulty, regardless of the reason for being so. 

As for the Covid guidance, the proposed guidance sets out trigger points where firms should take action and sets expectations on firms about actions they should consider to support customers. These expectations will help firms meet their obligations under ICOBS 2.5.-1R (the Customer’s Best Interests rule) and PRIN 12 (the new Consumer Duty principle) acting to deliver good outcomes for customers, but firms will still need to consider what obligations they have to their customers under the Consumer Duty and elsewhere in the Handbook. 

Next steps

Comments are invited by 11th March.