Funeral Planning Regulation
FCA Regulation of Funeral Plan Providers: Are you ready?
In June 2018 the government launched a public consultation to consider whether the pre-paid funeral plans sector should be regulated following concerns of consumer detriment. As a consequence, in June 2019 the HM Treasury set out plans to introduce compulsory regulation of the sector. The consultation closed on 2nd August 2019. We are now awaiting the government’s timetable for the FCA regulation of funeral plan providers.
What activities will the FCA Regulate?
The FCA will regulate two broad activities:
- “entering into funeral plan contracts”, i.e. selling funeral plans
- “carrying out a funeral plan contract”, i.e. administrating funeral plans.
This means that the FCA’s regulation will cover the key aspects of your business such as:
- Claims handling.
- Settlement and payment of funeral plan contracts.
- The fairness of your administration and cancellation fees.
- The collection of premiums from customers who pay by instalments.
- The engagement of funeral directors on the death of a plan holder.
How can you prepare for FCA authorisation?
In order to be authorised you will need to submit a Business Plan and ensure that you have appropriate systems and controls in place to treat customers fairly. This means you will in particular need to have:
- Key policies and procedures to cover areas such as complaint handling, record keeping, sales standards, FCA notifications etc.
- Appropriate business continuity arrangements
- Data protection (GDPR) controls
- A quality assurance function to monitor your sales activities
In addition, your firm will need to implement the Senior Managers and Certification Regime, which introduces new standard of accountability and responsibility. This requires firm wide training and enhanced checks for key individuals.
Want to know more?
Please contact our lead consultant Mo Arshad who has considerable experience of FCA regulation and has a wealth of experience of helping firms to obtain their FCA permissions. We can provide you with more information, carry out a FCA readiness audit and/or prepare FCA authorisation plan for you.
Mo holds a Law Degree, a Masters in Law as well as the respected Diploma in Governance, Risk and Compliance from the International Compliance Association.