Dear CEO | Release Date: 12th November 2021
To read a longer summary of this Dear CEO letter, click here.
To access the original FCA document, click here.
Short Summary
The Financial Conduct Authority (FCA) has issued a directive to all pre-paid funeral plan providers, informing them of the upcoming statutory regulation starting 29 July 2022. This regulation mandates that all providers and intermediaries must obtain appropriate FCA authorisation to continue their operations legally. Those failing to secure authorisation by this deadline must cease selling and administering funeral plans, as continuing without authorisation constitutes a criminal offence.
The FCA highlights the importance of submitting a thorough and complete application for authorisation well before the deadline. Applications submitted after January 2022, or incomplete applications submitted before this time, are unlikely to be processed in time for the regulatory commencement. The FCA has been proactive in engaging with the industry to ensure firms are aware of and prepared for these changes, offering guidance and resources on their website.
Firms that choose not to seek authorisation or fail to meet the FCA’s standards must plan to wind down their operations. This involves either transferring contracts to an authorised provider or refunding customers. The FCA will closely monitor these transitions and may issue consumer warnings about firms that are refused authorisation.
Key take-away:
Funeral plan providers must urgently review their compliance strategies and either apply for FCA authorisation or prepare to exit the market responsibly. Firms must communicate transparently with customers about their authorisation status and plans, ensuring consumers are not misled about the services being offered.