A letter has been published from the FCA to the Chair of the Treasury Select Committee addressing follow-up questions in the aftermath of a March evidence session on the FCA's work.

The questions and responses covered a number of current areas of regulatory interest and change, including:

Outsourcing of insurance claimsDear CEO letter in relation to the cost of living and insurance. The FCA also states that it has recently gathered data from a sample of insurers to assess whether they were meeting the FCA's expectations in terms of support provided to customers, including in relation to claims handling, and expects to publish its findings shortly. 

: the FCA explains that firms cannot delegate any part of their regulatory responsibilities and that where insurers engage a third party to fulfil claims, clear instructions, regular communication and quality auditing controls are important tools in ensuring customers’ claims are handled appropriately. The FCA acknowledges that some of the ways insurers may look to reduce costs could be harmful to consumers and points to its September 2022


: in response to a question about the sustainability claims of asset managers, the FCA points to existing rules around the use of voting rights and voting transparency under COBS 2.2B. The FCA also cites its wider programme on ESG and sustainable investing including the multi-firm review of funds marketed with ESG credentials, the wide supervisory focus on governance structures that oversee ESG and stewardship considerations and the establishment of the Vote Reporting Group. 


: the FCA summarises data in relation to the potential future impact of macroeconomic developments on mortgage borrowers (including by reference to the concept of "financial stretch" where the borrowing household faces monthly mortgage payments exceeding 30% of gross income) and highlights the importance and effectiveness of prudent affordability checks conducted by lenders. 

Banking failure

: the FCA responds to a question about its role in the resolution and sale of SVB UK and summarises its current concerns arising from recent events and their relationship with its regulatory responsibilities. The FCA cites the speed and scale of interest rate movements in multiple jurisdictions, the role of resolution frameworks and the speed of market developments in a digital environment. 

Cryptoasset regulationhere). The FCA also acknowledges the enforcement challenges in relation to crypto firms based overseas that promote products and services in the UK. 

: a key theme is the scale of the FCA's workload and the consequences for resourcing as regulatory change progresses in this space, including the expansion of the regulatory perimeter to include financial promotions for qualifying cryptoassets (see our earlier blog post