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Dear CEO/Director | Release Date: 3rd February 2023

To read a shorter summary of this Dear CEO/Director letter, click here.

To access the original FCA document, click here.

Long Summary

The Consumer Duty signifies a major shift in the Financial Conduct Authority’s (FCA) expectations, aiming to enhance the level of care provided to customers by focusing on outcome-driven consumer protection. This letter addresses Life Insurance firms and FCA-regulated outsourced service providers (OSPs), highlighting the necessary steps to embed the Consumer Duty effectively.

Implementation Timeline

End of October 2022: Firms should finalise their Consumer Duty implementation plans.

End of April 2023: Manufacturers must complete all necessary reviews to ensure compliance with the outcome rules.

31 July 2023: Duty enforcement begins for all new and existing products or services available for sale or renewal.

31 July 2024: The Duty applies to closed products or services.

Scope and Application

The Consumer Duty extends to all Life Insurance products and services used by retail customers, including pensions, long-term savings, retirement income, and pure protection products. It emphasises the fair treatment of customers and mandates a proactive approach to prevent foreseeable harm and support customers in achieving their financial objectives.

Expectations for Implementation

Life Insurers and OSPs are expected to integrate the Duty deeply into their business operations and strategies. This integration involves enhancing digital capabilities to meet the diverse needs of customers throughout their financial lives and improving decision-making processes.

Role of OSPs

Given their significant role in Life Insurers’ business models, OSPs must engage proactively with insurers to ensure that all aspects of the Consumer Duty are met by the established deadlines. It is crucial for both insurers and OSPs to define and agree on requirements and delivery timelines for regulatory changes.

Regulatory Foundations and Guidelines

The Duty builds upon existing FCA regulations, including:

These guidelines form the foundation upon which the Consumer Duty expands, aiming to ensure that all products and services offered meet the new higher standards set forth by the FCA.

Outsourcing Considerations

While outsourcing can enhance operational efficiency, Life Insurers remain ultimately responsible for compliance with the Duty. They must ensure that any outsourced functions adhere to FCA standards, particularly when OSPs can influence customer outcomes significantly.

Review and Compliance for Existing and Closed Products

Firms must rigorously review existing products to ensure they meet Duty requirements by July 2023. For closed products, although the deadline is extended to July 2024, firms are encouraged to begin reviews early to address any potential issues proactively.

Supervisory Approach and Next Steps

The FCA’s supervisory approach will be robust, focusing on ensuring that firms not only comply with the Duty but also demonstrate a cultural shift towards prioritising customer outcomes. This approach will involve regular reviews and feedback, ensuring that Life Insurers and OSPs maintain high standards throughout the implementation process.

Supporting Resources

Life Insurers and OSPs are urged to utilise available FCA resources, such as detailed guidance documents and sector-specific communications, to aid in their compliance efforts. These resources provide valuable insights into good practices and areas requiring attention.


As the Consumer Duty marks a significant change in regulatory expectations, it is imperative for Life Insurers and their OSPs to fully commit to its implementation. This commitment should reflect in their operational practices, customer interactions, and overall business strategies to ensure they deliver enhanced consumer protection and foster trust within the market.

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