Consumer Duty compliance in insurance is now principally about whether firms can demonstrate customer outcomes rather than whether they completed an implementation project. For insurance brokers and MGAs, this can be difficult because the customer proposition is often created by several businesses across the distribution chain.
An insurer may underwrite the risk, an MGA may design the product and influence pricing, a broker may control the sale and another firm may administer the claim. Each regulated firm therefore needs to understand the part of the outcome it controls or influences, what information it needs from others and what evidence it can provide back into the chain.
The strongest frameworks connect Consumer Duty with PROD, ICOBS, distribution, claims and complaints. They do not treat the Duty as a separate annual compliance exercise. The FCA's recent work on consumer understanding, products and services and outcomes monitoring reinforces this direction by focusing on whether firms test what customers actually experience and act when the evidence identifies poor outcomes.
Consumer Duty should sit inside the existing insurance framework
The Duty does not replace the detailed insurance rules. A broker may need to comply with ICOBS while also considering whether its communication allows the customer to understand a significant exclusion, while an MGA acting as manufacturer may need to satisfy PROD fair value requirements and the wider Consumer Duty framework where both apply.
This matters because the same evidence can reveal several different issues. A pattern of customers misunderstanding an exclusion may indicate a consumer understanding problem, but it can also suggest that the product design or distribution strategy is not working for the intended target market.
Claims can create similar overlap. A deterioration in customer support during claims may be a consumer support issue, while unusually poor claims outcomes can also affect the firm's view of product value or trigger a product review.
Compliance should therefore organise the evidence around the customer and product rather than around separate Handbook chapters. The objective is to understand the outcome first and then identify the regulatory requirements and controls that need to respond.
Products and services should connect directly with target market
The products and services outcome requires firms within scope to consider whether relevant products and services meet the needs, characteristics and objectives of their target market. For an MGA involved in manufacturing, this should align closely with PROD target-market and product approval work rather than create a second parallel methodology.
The target market should influence product design and distribution in practice. If the product has been designed for a particular customer group but a material volume of business repeatedly falls outside it, management should understand whether the issue lies with the target-market definition, broker distribution or the design of the product itself.
For brokers, the focus will often be on the service and distribution proposition. A firm should understand the customers it intends to serve, the products available to those customers and whether the service model allows it to meet their needs. A broad panel does not automatically create a good outcome, just as a restricted panel does not automatically create a poor one.
The FCA's July 2026 products and services work reinforces the need for regular monitoring of customer outcomes and continued review of whether products remain appropriate for the target market. Insurance firms should therefore connect product governance with live distribution and customer evidence rather than treat target market as a document completed only when the product is launched.
Fair value needs visibility across the full distribution chain
The customer's total insurance cost can reflect more than the underlying risk premium. MGA remuneration, broker commission, customer fees, premium finance and ancillary services can all influence the final proposition, which means firms need sufficient visibility across the distribution chain to understand the price the customer ultimately pays.
For manufacturers of relevant non-investment insurance products, PROD contains detailed fair value requirements. The FCA has also made clear that compliance with those rules is central to demonstrating the price and value outcome of Consumer Duty for those products.
The assessment needs to consider quality as well as price. Coverage, exclusions, claims experience and service all influence the value the customer receives. A lower premium does not automatically mean better value if the product provides materially less meaningful benefit.
Brokers should also consider costs they add to the proposition. A customer fee or premium finance arrangement may provide genuine benefit, but the firm should understand what that benefit is and how the resulting customer price fits with its regulatory responsibilities. Benchmarking against competitors can provide context, but it should not replace analysis of the firm's own proposition.
Consumer understanding is a live 2026 priority
The FCA's March 2026 consumer understanding publication gives firms practical examples of where communications can fail even where required information has technically been provided. Dense language, weak visual hierarchy, poorly positioned warnings and limited monitoring of customer behaviour can all make it difficult to demonstrate that communications support informed decisions.
Insurance is particularly exposed because significant exclusions, policy limits or conditions may not become important to the customer until a claim occurs. Firms should therefore consider not only whether the relevant information was supplied, but whether customers can reasonably understand the features that are most likely to affect their decision or subsequent outcome.
Testing should be proportionate to the importance and complexity of the communication. Customer research, call monitoring, digital journey behaviour, recurring enquiries, complaints and claims disputes can all provide useful evidence. The purpose is not to test every routine message extensively, but to focus on communications where misunderstanding could cause material harm.
The findings should then change the communication where necessary. If customers repeatedly misunderstand the same exclusion, the answer may be to improve prominence, timing or explanation rather than simply record that the exclusion appears in the policy documentation.
Claims are a critical Consumer Duty test
For many customers, the claim is the point at which the insurance product is genuinely tested. The consumer support outcome is therefore particularly important during claims, because customers may be dealing with loss, illness, bereavement or another event that also changes their support needs.
Customers should be able to notify a claim, understand what is required, receive appropriate information about progress and obtain help without unreasonable barriers. The exact responsibilities differ between insurer, MGA, broker and any third-party administrator, but each firm needs enough information to understand the outcomes for which it is responsible or which it materially influences.
Vulnerability can arise after the original sale. A customer who did not require additional support when buying the product may become vulnerable because of the insured event itself. Claims processes therefore need enough flexibility to identify relevant needs and adjust support where appropriate.
Where claims are delegated or outsourced, contractual service levels are not enough on their own. Management should understand relevant outcome measures, complaints, decline patterns and support issues. This is particularly important given the FCA's 2026 review of oversight across delegated authority and outsourced claims arrangements.
Information sharing determines whether the Duty can work across distribution
Insurance distribution often involves several firms, and no individual participant necessarily holds all of the information needed to understand the customer outcome. Manufacturers need information from distributors about how products are sold and experienced, while distributors need manufacturer information about target market, product design and value.
The regulatory challenge is turning that principle into routine information flows. A contractual right to request information can be useful, but it is not the same as receiving the data required to manage the product. Firms should determine what information is necessary, how often it should be obtained and who is responsible for reviewing it.
The level of detail should follow risk. A complex retail product distributed through a large intermediary population may justify more granular information than a simpler lower-risk product. The objective is not maximum data collection, but enough relevant evidence to identify poor outcomes before they become systemic.
The framework also needs escalation. If a broker or service provider repeatedly fails to provide information that the MGA requires to discharge its regulatory responsibilities, management should decide what consequence follows. Information governance is weak where important data is contractually required but persistent gaps are simply accepted.
Outcomes monitoring should identify differences, not just averages
Consumer Duty requires firms to monitor outcomes, and the FCA's insurance work has emphasised the need to assess, test, understand and evidence what customers actually receive. The appropriate measures depend on the product and business, but can include claims, complaints, cancellations, value assessments, customer support, communication testing and distribution information.
The quality of analysis matters more than the size of the dashboard. Firm-wide averages can conceal poor outcomes associated with one product, broker, customer group or service provider. Management should therefore segment information where there is a regulatory reason to believe that meaningful differences could exist.
Vulnerability should be considered in the same way. Counting how many customers are recorded as vulnerable tells management relatively little unless the firm also knows whether those customers received appropriate support and whether their outcomes differ from other customers in a way that requires action.
Complaints are useful evidence, but they should not become the sole indicator. Customers do not always recognise that they have received poor value or formally complain about barriers they encountered. The firm's monitoring needs to be capable of identifying weaknesses without relying on customers to diagnose the regulatory problem themselves.
Governing-body review should be based on real evidence
The governing body's Consumer Duty assessment should bring together the firm's underlying outcome evidence rather than replace it. Senior management needs enough information to determine whether customers are receiving good outcomes, whether material weaknesses exist and whether the firm's future strategy remains consistent with the Duty.
For an MGA or broker, that can require information spanning product governance, distribution, value, consumer understanding, claims, complaints and vulnerability. The board should also understand limitations in the evidence rather than receive an artificially positive conclusion where data is incomplete.
A useful report shows management challenge. It should identify weaker outcomes, explain what is being investigated and record what action has been taken. A framework in which every product and customer group receives a positive rating year after year may indicate that the measures are not sufficiently discriminating.
The strongest evidence that the Duty is embedded is often not a perfect dashboard. It is a clear example of the firm identifying an emerging problem, understanding its cause, changing the product or process and then confirming through subsequent evidence that the outcome improved.
How Regulatory Counsel can support
Regulatory Counsel supports insurance brokers, MGAs and other regulated insurance firms with Consumer Duty, including independent reviews, outcomes monitoring, fair value, consumer understanding, product and distribution governance, vulnerability, board reporting and remediation. We can assess the full framework or focus on a particular product, distribution chain or Consumer Duty outcome.
Speak to Regulatory Counsel to discuss an insurance Consumer Duty review.
Frequently Asked Questions
It can apply where the firm and relevant activity fall within the Duty's retail-market scope. The broker should assess its customer relationships, products and distribution activities against the current rules.
It can. The analysis depends on the MGA's activities, products and role in the relevant retail distribution chain rather than the MGA label itself.
No. PROD continues to apply to relevant insurance product manufacture and distribution. Consumer Duty operates alongside it where the relevant business is within scope.
The appropriate evidence depends on the business, but can include claims, complaints, value assessments, customer support information, communication testing, target-market data, distribution information and vulnerable customer outcomes.
The governing body should receive sufficient evidence about retail customer outcomes to perform the assessments required under the Duty, challenge weaknesses and understand material remediation. The board report should be based on underlying monitoring rather than treated as a substitute for it.