On 29th of July 2022, the Financial Conduct Authority (FCA) will undertake the regulation of funeral plan providers. Unlike previous regulatory transitional periods, there is not a temporary permissions regime in place for funeral plan providers. Application for authorisation for funeral plan providers opened in September 2021.
Funeral plan providers that have submitted their application for authorisation to the FCA are being assessed to ensure that:
- Firms are selling products which offer fair value, sold fairly and meet consumer needs.
- Firms maintain high conduct standards and have sufficient resources and risk transfer arrangements so they can deliver funeral services.
- Consumers have time and provided with all of the information they need to make well informed decisions.
Firms must furnish the FCA with documentation to evidence its proposed business processes to demonstrate that it will have appropriate systems and controls to satisfy and, once authorised, continue to satisfy that the firm holds high conduct standards.
In addition to assessing firms for authorisation, the FCA is imposing new rules to make sure consumers are adequately protected. This includes:
- A ban on cold calling
- A ban on commission payments to intermediaries.
Once funeral plan providers are regulated by the FCA, consumers will be able to make a complaint to the Financial Ombudsman Service and will have protection from the Financial Services Compensation Scheme (FSCS) should their provider go out of business.
Download: FCA authorisation – the basic process
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